BSI IMAGE EVALUATION TEST TARGET (MT-3) / O [L U. 1.0 i.i 1.25 UBS ■is K^ ::: lis. 2.0 1.8 1.4 II 1.6 V] /a V 7 /«^ «%s ^1? ^ r^ CIHIVS/ICMH Microfiche Series. CIHM/ICMH Collection de microfiches. Canadian Institute for Historical Microreproductions Institut Canadian de microreproductions historiques 1980 Technical Notes / Notes techniques The Institute has attempted to obtain the best original copy available for filming. Physical features of this copy which may alter any of the images in the reproduction are checked below. L'Institut a microfilm^ )e meilleur exemplaire qu'il lui a 6t6 possible de se procurer. Certains ddfauts susceptibles de nuire d la quality de la reproduction sont not^s ci-dessous. □ Coloured covers/ Couvertures de couleur Coloured maps/ Cartes gdogrsphiques en couleur n Coloured pages/ Pages de couleur Coloured plates/ Planches en couleur V Pages discoloured, stained or foxed/ Pagos ddcolor^es, tachet^es ou piqudes D Show through/ Trar the subsidies of the second section on the first. When it was r^^ported to ns that th"^ first section was completed, we paid, as did the Federal Government, the whole subsidy, so that the remaining section is now completely uncovered. Worse than that, the road not having been operated or used for two years, the works are in a hopeless condition. The culverts threaten to crumble, ana the ties have in places been onrried away by freshets. The embanknaents are not nearly as good ns they were, as may be easily understood. It will, therefore, be necessary to lay outconsiderabia addi- tional sums of TDoney tu put that part of- the roal on which the doubllag up was dune in a fit _ 2 — •imdition, (hat is to nay, tliat part on which a double payment of the subsidy was made. We havedecidlen possible to nay, notwithstanding; tho gsnerosltv of the Lesrlslaiuro during tho las', session. We were not able to pay evoryihlnc cither bucause we had not enough money, and this Is the principal reason, or bwiause tho proof of the claims oarue In too late Weask of you a subsidy of SW.OOO acres of land to complete this roal, in addition to the $5 i.OOO required for the construction of i he brldg-j over the rivor Oascapoiia. We are in hopss nf b si nyc able to trjat to advantage with wealthy In'Uviduals or p»>werful companies. Grant Heaven that onr expectations may be realized, and that we ba not docolvrd once more. At all evunts, wo Hliall be doubly oaiitlous ; we shall act with more pr ideme, and shall eudeavor to completo this railway us far as Oaspt^ Basin, there to connect with the navigation of the Atlautio." You are also reported by UElecteur of the 21st November, 1890, in a speech on a motion made by Mr. Carrier, M. L. A., for tlie prodnction of papers relative to the Bala des Chaleurs Railway, to have spoken as follows : — You all remember tho touchlnij union of sentiment with which, during the last session, the House authorized the government to pay a sum of $20,00' to the unfortunate laborer* who had not been paid for their work on the railway. 1 wish every one of the inemtier* had time to read the sad tale which is nboutto be laid before the House. The relation of the saddest things is to bo found therein. Poor laborers, with tioihing but their work todepenj upon, had not in the month of March last recpived their wiiges for the ten months previous.and these yf&gc,<, tho only thing they had toliveupon and feed their tamilies This moaey.whlch had been furnished by the province, on oonaiUou Ihat it would be used to pay these legltima e and pri vlleifed debts, haa found its way Into the p >ckots of speculators, More than that , the farmers, tbroui^h whose lands the road passed, had not been paid, and when thoy presented themselves for payment of iheir rightful Uue, for answer thoy were turned out of the offices of the company, I remember one instance in particular. A poor flshermao, who owned a single lot, nearly the whole oi which had been taken by the road, fludingit Impo'.'sible to work the small portion of It which remained to him, came to mo and said: "H'lre is my position. I had u bit of iandonwhichl raisO'l the necessary products, such as potatoes, etc. Besides this I earned my 11 vel hood by fish- ing. The railway has takoa a part of my land ; I cannot cultivate the balance and I have not been given a cent." I sent for the special agent of the company— I speak of 1S88— when I passed a short 11 me 1 n this part of the country. 1 asked him why he did not pay. He answered me : *' I have not paid because the company has given ine no money." Then, why do you take possessloin of the land without olfering the money ? " Uecauife the company p omlaod to send me the money at once, and to pay the amount agreed upon." You must then have put In claims? " Why, yes, I wrl « at least three times a month, and 1 do not even get an answer. It is impossible for me to p\y this good man a debt which we acknowledge to be due, and, for a good reason, becausPtho.se who are ai, t he head of the company are busy drawing the money but never pay It out. Suoti in tfae position." How many such cases are there ? Take, for instance, the poor laborers, who, during the winter, have made ties. They worked the whole winter; they brought them down th« rivers Muld great hardship • they delivered them to the company, and up to the last moment, whun we stepped In, more than three-fourths of these people had not been paid. They give their wood, their time, tliuy spent the winter in the bush to earn a little monev. and contributed by their laiM>r to the constructiou of this road. Their wood had been used, and they were not, paid; they were left to starve. t4o ask the poor people who, for mouths, have fed the laborers who workos, barriers thrown across the way, ^ind you cannot remove them. Shall the progress of the whole province or of part of the pr^vlnueb* arrested because Individuals have formed companies that have taken tho money of the Legialature and stand •took still ? This is not as it was Intended to be by the Legislature. The tDt«nt of the Legislat- ure is that when a company doeg not proceed with tne boildlng of the railway It shal! ^tand by: and it it does not stand oy there must be some means to force it to uo so. We cannot ruspenu the ft> I ward match of the who>e country because certain parties find it proAtable to epeoulate I — 3 — vtiM k • vlth the money of the ponple. What Ih ocoarrinr atthli moment? Take the BttiadesObaleuM. This compr>ny has asked lliat Hh sabsititoH Mliould be doubled up. AHU^atdy of lO.OiO acrce of land per mllu bad b-ou granted lo fur 180 miloti, la all. l,80u,00tj acres. Thn Federal (^oviruraeiik had grran ted U$'i,2(J0 per mile for laii inlteH. Both govornment.s have doubled up the sabvidiea, and now. the oDnipany af>er bavlnic received all the Nubstdies destined for the railway in the Inteuiion ot thoso who voted it, stays the whole pro^esa of that region, refuHes to pay logUiniate debts, refuses to pay for the land over which the ru iway passes, to pay for th'j ties that were made last wintur bv '.he unfortunate farmer^}, t^ pay for the provlslous bouj^ht ia the stDres. ThlH company remains, ard when we nay to othors, ' D« «o and try topurchaso the rights of the charehoUlers In order that things may proceed," the shareholders hold uaok; forexorbltant unc3H. Thoy have nolhing in view but to m*ke money at the expsuse of the public. Wo ask tor the power to annul this chai tur In the public interost. If we obtalu thr |K>wer, what will be the cousequenoA? The shareholders will sell their rlKhts at reasonable prices, and otiter people will ba enabled to build the road. Take other Instances : You have the Montreal and Sorel Etallway Company, to which we gave flI2.ii00 lo pay certain claims and to complete the road. The claims have been paid, but the •ompany refuses to complete the road, and. since that time, not ouly does the company refuse toob"y UK, but it does not even answer our letters. Do you think that Is right? Why not c.in- cel thi8c?\arter, and allow rosp )uslblo persfius to build tbis road, which wiliaftord an ouMet lor the wealth? Inhabitants of Vorcheres and Gliambly? Public Interest retjulre.s it; private inter- ests are against It. I could give other Instances, but I will bo conientto montioa tbe two which appear to be the most flagrant. I also And, in the issue of the 21st March, 1890, of the saiao paper, L'Electeur, in a report of observations made before the Lojjislative Assembly, concerning certain reso- lutions relating to the Bale des Chaleurs Railway Company the following : — Mr. Martin complains that certain claims against the Bale des Chaleurs Railway have not been paid. Mr. Morclor answers him as ioUows :— " No oomplalutoould be more unjust than this. We have hitherto had iiothln!; but thanks Woonly pay privileged claims; we do not pay contractors' claims. We pay privileged claims, that Is, tnose of farmers, 'Then they prove them, and when they are accepted ; wo do not piiy them when thoy are disputed. There are farmers whose land has been taken by the rallwav. aad whom we cannot pay. beoausoof litigation, or because arM'rationHhave not been bvM. We have paid the farmers who made the Mes. When the amounts are admitted by the oontractorn we pay. W*^ consider xuoh claims to be privileged. The laborers who worked on the road are paid by us directly their cialias are approved by the contractor." In a record of the Department of Public Works and Railwa^a, I find that in April, 1891, the government was taking steps to execute the legislation granting 800,000 acres uf land to the Bale des Chaleurs Railway Company under the Act above cited ; and I fiad there a telegram from the Hon. Mr. Robidoux, attorney-general, to the Hon. Mr, Garnoau, of date the 17th April, 1891, from Montreal, in the following words: — "THB HOX, PXBRRB GARMBAtr, OOMML'-SIONEK OK PUBLIC WOKKS. QUBBEOr *' I tear to be detained hero by illness longer than I thought. You may proceed to buHioeKs In nay absence. I ratify in advance all that you will do In the matter of bhe Bait- des Ohaleurs BaJiway. Langeller will tell you exactly what was decided upon beforeithe departure of Mr, Mercier. I am Informed that any delay in this matter may be prejudicial to the Interests of the enterprise and of the province. "(Signed,) J. E. ROBIDOUX." On the same day, Mr. A. M. Thorn made to the government the proposal embodioii in the Order-in-(]!ouncil No, 237. Between the 2l8t and 23rd April, 1891, the Hon. Mr. Garneau, commissioner of Kublic works and railways, came to confer with me on the subject of the proposal made T Mr. A. M. Tiiom and those whom he represented, for the reforming of the Bale des Chaleurs Railway Company— on the conversion into money of the subsidy of 800,000 acres of land at the rate of 35 cents per acre, making $280,000— on the payment of the subsidy of $50,000 for the building ot the bridge over the Grand Cascapediac River, and the payment of the debts which, according to the law and the foregoing quotations, was to bo made for the protection of the laborers, and of dealers in provisions againgt the contractors of this road and to settle for the right of way— and also regarding the appointment of a commissioner to make the payments. I advised the Hon. Mr, Garneau to act with great caution and circumspection in this matter. I reminded him that the construction of this railway had already given considerable trouble in the county of Bonaventure, and I begged of him to see that all b« done according to law, and on the report of the attorney-general. He told me that he had the report of the Hon. Mr. Charles Langelier, but I pointed outto him that this was not the report of the proper officer. He told me he would communicate with the Hon. Mr. Robidoux, who was lying ill at the time, and thereupon he took his leave. On the 23rd, the Hon. Mr. Garneau again called on me. with reference to this mat- ter, informing me that the committee of the executive had adopted a report on the •abject of the Baie de« Chaleura Railway Company, and another appointing a commia- m:{ % -i- aioner to make the payments ar.thorized by law. T refX^ated my advice to hira to act with prudence 'j^wA ciicuniKpei.tion; and he informed roe t)iat the attorney-jreneral had reported to him that every tning was in co\jformity with the law, but that, as he was ill he required a few days to write out his report in its final shape, and ho (Hon. Mr. Garneau) asaured me that he would see that special instructions v;ere given to the com- missioner. On the 23rd, after this interview, 1 sanctioned two reports of the committee of the executive, which became the following orders-in-council: — Copy of a Report of a Committee of the Honourable the Executive Council, dated 21st April, ISyi, approved by the Lieutenant Governor on the 23rd April, 1891. No. 237. Concerning the Bale des Chaleurs Railway. The Honourable the Commisqjoner of Public Works, in a report dated 20th April instant (1891), sets forth that he has received a letter from Mr. Angus N. Thorn, of date the 17th April instant, reading as follows: — QuKBBO, 17th April, 1891. To Honourable P. Garnhau. CominlHsioner of Public Works nnd Prein'er ad interim. Sir,— We ar« In a poMlilon to i-ecure the tiansfer 'f the charter of the Bale dee Chaleurs Railway il the following propOHltion Is accepted by thu Govirnnien'. the company under the manaKomoniof a ne^ board ot directors will be prei ared to goon wMh the works, complete the road and have it ready for traffic on or before the 31st ue< ember, lt)92, from Mataptdla u> Paspc- blno. and thence to (ianp^ Basin as soon as cIrcuuiHtances will nermlt. For the carryinsr out of the nrcBent proposition it is understood that the Goverumf nt hhall pay the company:— 1. The balance of the subsidy granted by the Htatutpsof Quebec. 45 Vic, chap. 2\ and its amendments, and 51-52 Vic. chap 91, ^ec. 12, amounting to.i!260.iK)0 to he payable a.s earned. 2. The subsidy of $50,000 granted by the statute of last session, 54 Vic. chup. ^*. sec. 1. sub-sec. I, to be payable as soon as a bridge overthe Gram) Caacapedlals flnished and accepted by the GOVGrnm»*ll be paid upon a Judgment or arbltratovs' report in fax our of any payment. When the commissioner appointed by the Government shall accept a claim and Mr. Thorn refuses his certlfloates and approbation, then and in each case the claimant has an absolute ilght to an arbitration, and the Uecislon of the arbitrators shall then slate that the costs incurred shall be paid by the party against whom the decision is given. If Mr. Thom falls to appoint an arbitrator after fifteen days notice to do eo, the commissioner may then pay the cliiim, and bis action shall be blndiog on all tiarties. As a guarante:^ that they will go on with the works, build, complete and run !*, I «\ ■ i I i •s — 5 — 3. To continue the works on the sixty milefi comprised between Metaoedia and the river Grand Cancapedia, as soon as the company shall be able to take possession of this part of the road, that is to say as soon as tlie claims which are not contestod shall have heen paid; which shall be doiio at the dili;;enco of the (joveriimtnt be- tween now and the 10th May next, at the latest, but without recourst^ agaiiist the Government in default of sucii dili>j;enco, to (ujimnence the explorations upon the forty mi'es between the river Grand ('ascapedia ami PaajKibiac, as soon as the proposition shall be accepted, and push them on with tlie utmost dispatch. 4. That the first Board of Directors of the said company shall be composed of the following iK^rsons: James Cooper, of Montreal; J. P. Dawes, of Lachinu; Alexander Esving, of Montreal ; Anj^rus M. Thorn, of Montreal ; James Williamson, of Montreal, and of two i)erson8 named \>y the GovernmenI,. c. To deposit as a guarantee in the hands of tie Government five hundred thou- sand dollars (jf debentures or bonds of the (!om[)any of the present issue or any other satisfactory guarantee with the privilege of exchanging the said debentures or bonds for an equal amount of debenturetj or bonds of any other issue, not to exceed liowever the actual issue and of the same value in case it sl;all bo judj^^ed expedient tt; with- draw tiie present issue; v/hich debentures or bonds or other guarantees shall be returned by the Government to the company as soon as the ro:'.d shall have been finished to Pasjjebiac. On condition : 1. That the balance, to wit, $260,000 of the subsidies granted to the said railway by 45 Vic, chap. 23 and its amendnients and ol-52 Vic, ch. 91, sec 12, shall be paid to the company in proportion as the same shall have been earned according to law. 2. That the subsidy $i)0,000 (fifty thousand dollars) granted by the statute 54 Vic. chap. 88, sec. 1, sub-S6(;tion I, shall be paid to the company as soon as the bridge over the river Grand Cascapedia shall have been constructed and accepted by the Lieutenant Governor in Council, upon a report of the Government Engineer.* 3. That the Goveriunent binds itself to pay the company with the subsidy of 800, 000 acres of land granted by the statute 54 Vic, chap. 88, section 1, sul>-8ection J, con- verted into money, which subsidy shall be kept by the Government and employed by it to pay the actual debts of the Bale des Chaleura Railway ; and the surplus, if any, shall be, after the payment of all claims actually existing against the company, kept by the Government, which shall render an account thereof to the company in final settlement. That the said debts and claims after they shall have been approved of and cer- tified by Mr. A. M. Thorn, representing the company, shall be paid by a person named for that purpose by the Government; and in default of such approbation and such certificates they shall be paid upon a judgment or report of arbitrators in favour of anv claimant. In the case of the Commissioner named by the Government accepting a claim and of the said Mr. Thom refusing his certificate, then and in each case the claimant shall have an absolute fight to an arbitration and the award of the arbitra- tors shall then declare that the costs shall be at the charge of the party who shall fail; and in default of the said Thom to name an arbitrator after fifteen days' notice «o to do, ttie Commissioner may pay the claim for all purposes whatever of law, and his action shall bind all the parties. Certified, (Signed) GUSTAVE GRENIER, Clerk of tlie Executive Council Copt of a Reportof a Committee of the Honoiirnble the Executive Council, dated the 21st April 189 . approved Dy the Ueutonant-Qovernor, li'3rd April, 1891. No. 238. As to the nomlnatioa of a Commit.sloQer to pay the clalmR against the Bale des Chaleura Hallway Company. .,^1^ The Honourable the Commlssloaer of Public Worlds In a ra^oraudum dated twcnty-flrt* Apr4 iHStart (189 ), recommends that Mr, J. C. LaoKslier, AsHlstaiil-Reaistrar of the P'-ovlnce, he named rt Commissioner to pay ihe claims against the Baiedcs Chaleurs KaUway Company, iaooul)rmlty with thedlspjsUionsof Ihe Order in CouaoU number '.J37 of the 23rd April, 1891. Certified, (Signed) GUSTAVK GBPNIER, Cierk of i e Executive Council. I find that in conformity with the recommendation made by me to Hon. Mr. Gar- neau, he gave on 24th April, 1891, the following instructions to the commissioner appointed:— ■I i ■i _ 6 — "(L. E. 13M. L. B. No. 638.) •• Dbfartmbni or Fubmo Works, < •• Quebec. 24th April, 1891. J "/. C. Langelier, Etq., Deputy Regtatrar of the Province, Quebec. " Sir.— As you have been appointed a speolal oommlsejoner by Order-ln-Counoll No. 238, of 4au> the 23rd iDHtant, (/> pay the claims agamst tbo Raiedea ChRh-urH Railway Compaay, In oon- forxnlty with f heOrder-lu-Councll No. 277, panaed on the Zird Instant, I think 11 proper to autnorlr.o yoa to at onneoxamltie and verify ihoae outBtandlnKolalinMand to decide wh ten Bball be ooudidured an privileged debts legitimately duo by the company or by the conlractora of the BaiedesChaleurs Railway, or of thKHOctloDH of thlH road between the 20th nnd 70th mlleR be- yond the little RiverCaBoapediii in thedlreollonof Pawwebiao, acoordlng to the prescriptions and oonditlons mentioned In the said Order-ln-CouncU No. 2;17. And when you will bo in a poRlliob to ifivc mo detailed 81 HtementH. with documents in support thoreof, ot the privileged claims, Whether contested or not, payment of which you will oe prepared lo make in conformity with •aid Order-in-Ooundl No, 234, and of the Act iherelu mentioned, 54 Vict., chap. 88, soc. l.par. J., I shall plat^e at your disposal, as you Nhall want tliem. the amounts required to paythoprivi- leKed clnims approved of, or for which u jud^rnencor the award of thearbitraiors shall have been firen. and thit* by means of requisitions to ne made by the undersigned to the honorable the 'rovinclal Treasurer. oB the subsidy of 800,(00 acrf s of land converted into money, which RubHidy was granted by the statute (paragraph J.)io aid the completion and equipment of the nald lailway for a distance of 80 miies, as determined In the f>ame statute, on couditlon that you furnish me, on demand, with a deiailed statement, special or general, of the sums which you t-h!7,()73.54, and informed him that others would probably be forthcoming as soon as payments should commence. Your declarations made in the House, as quoted above, tliat about f,')0.000 of priviledged debts remained to be paid, and the letter of Mr. .lean Chrysostome Langelier to the Hon. Mr. Garneau, correspond closely enough to show approximately what part of the grant of 800.000 acres of land converted into money was to oe used to pay the claims foreseen by the law, the balance being destined for the building and completion of the road. Between the 23rd and 26th April, the Hon. Mr. Garneau again conferred with me on this matter of the Baie des Chaleurs Railway. He told me that strong pressure was being brought to bear upon him, that he was required to do things that were repugnant to him, that threats were made to him of cabling to the Hon. Mr. Mercier, and he added that he was inclined to resign. I said to him : " These threats art futile. Under " t e circumstances, 1 think, that being the Prime Minister accredited to me during " the absence of the Hon. Mr. Mercier, you cannot leave me without an adviser; what " you have to do is to resist and to conform in all respects with the law." He appeared to me reassured and left. After the recovery of the Hon. Mr. Robidoux, the Hon. Mr. Garneau gave me a copy of the report of the attorney-general, "w herein I read, among other things, the following : — There is another point wh. . is not specially within my attributes and upon which I have been requested to express an opinion : Is the contract implied in the order-ln-eouncil of the 2Srd April, such a one as I should have concurred in had I been present when the order-ln-coaueil was passed? I have no hesitation In saying that I ?oncur In the order-in-counoP and that I approve of It. I approve of It lor two reasons vMJMit. Because I believe 'hat it was of toe highest importance to take the Bait des Chaleurs Railway out of the hands of the o!d cmpany ; the second reason for which I would have concurred in the ordei-ln-councll, is the solver cy of the parties whocom- BOKC the Bale dt s Chaleurs Railway Company as reorgRnlzed, and their unquestioned repuiation mr uprightness in business. In this I find a sufflcieut guarantee that the company will carry out Us andertakiug. Before the 7th Ju!y, 1891, the Hon. Mr. Garneau called upon me again with respect to this matter, and informed me that he had received a letter from the honorable th« Prime Minister (then in Europe), in which the latter declared himself satisfied with the transaction concerning the !baie des Chaleurs Railway Company. /• ■m f Aftwr what is promised I ant juetifiod in l)elieving, up to the time, tliat certain revelations to which I will refer liereinafler i^ore made, tuat the government would conform ko the law in the aettlement of this matter. Incidental to the cf>ngideration of a bill promoted by the Bale des Chaleiirs Rail- way Company in the Parliament of Canada, and referred to the Committee on IlaiU ways. Telegraphs and Harbors of the Senate on the 4tii August, 1891, sworn witnesses declared that on the 28th April, 1891, the Hon. Mr. Garncau, artinp as prime minister ad inUrhn and pr'wincial treasurer, signed, payable to the order of Mr. J. Cbryaoatom* Langelier, the comaussioner appointed under the Order-in-(/onnci] No. 238, a letter of credit on the Union Bank of Canada for the sum of $1(>0,()01), payable on or before the 10th July then next, bearing interest at h per cent, from the Ist June until pay- ment, and another letter of Ciedil on La Banque Nntionale for the sum of $75,000, ayable on or before the 10th of July, lo91, bearing interest at 5 p(^r cent. Ironi the Ist one then next until payment; that tiiese letters of credit were endorsed by the gov- ernment commipsioner, and that the proceeds tliereof were paid to Mr. C. N. Arnuirong, coutra(;tor of the Baie des Chaleurs hailway Company. Witnesses heard before the same 0(>mmitt;ee have also revealed certain circum- stiinces which preceded and followed the issuance of these letters of credit ur.d the use to wliich thev were put. It was declared ui)der oath tiiat long before the 28th April, 1891, ,>robably in the course of January preceding, Mr. Ernest I'acaud, (editor of the newspHjier UElecteur, of Quebec, and Mr. C. N. Armstrong met at ibe St. Louis hotel, in Quebec ; that the last named party asked Mr. Pacaud wliether he thought the gov- ernment would be disposed to negotiate with other persons on the s'ubjiict of tlie Baie your books? A. Simply that he should liive a portion of this moui^y on dbpr t until the letter of credit was paid, as I have already sad. tj,. Was there any proposal made in regard to a series of entries to be made in your books wliich would not have been true entries? A. Well, we consid^rerl that discounting tlie letter of crsdlt without paying out the proceeds was not e.vaclly a correct transaction. Mr. Barwlck—I will repeat my question again. NV a- there a proposal made In regard to a Heries of entries to be made in your books which would not have been true entries? A The proposition was to discount the letter oi credit and to p;ace it to tlie credit of Mr. J. C. Lango ier, 'jcmmt^sioner, to charge the.se clieques airalnstlt— Q,. WniU cheques? A. Tn»•^e five $2l),000 cheques against it . Q,. \s if they had been paid? A. As If they had buen pala; and place a portion of it to Mr. Paouud'N credit. Q,. Which ho could draw at once? A. Yes. And the balance to remain on deposit to be wlthdiawn after the letter of credit had been paid. CJ. that 1«, Mr. Paiaul wanted you to give him $40,000 immediately, and go through tbe foim of giving him the bala.nce, whereas in fact he would not have got this balance until thtt balance had been paid, whe:. the letter of credit was cashed? A- He would not have drawn the balance. Q. And to that proposition your bank would not lend Itself ? A. No. The evidence of Mr. J. Chrysostdme Langelier, government commissioner, and of Mp. C. N. Armstrong, shows that Mr. J. Chry808t6me Langelier went, some time about I "WSP. • the end of April, to the office of Mr. Paoaud in IJElectew building, Lower Town, Que- bec; that Mr. Armstrong met him there, that Mr. J. Chrysoatdme Langelier made out a cheque for $100,000 to the order of Mr. C. N. Armstrong. Mr. Armstrong and Mc Pacaud went into an adjoining room, and on tlioir return Mr. Armstrong asked the government commissioner to substitute five cheques of $20,000 in lieu of the cheque of $100,0(W, which Mr. J. Chryao8t6me LangelieF did, af<-er having destroyed the cheque for $100,000. ^ The following is to bo found in the testimony of Mr. Armstrong :— Q. With whom did you go to Mr. Pacaud's ofHoe ? A. To the best of my memory I went Q. Had you the cheque < with you wheu you went there? A. No. Q. Were the cheques eudorsed ! A- 1 enuorsed the cheques when I was there U Did you haveaa nppointmeat ? A. I don'i thiuk so. Q,. What purpose did yoa go there for? A. I dou't know that I had any special purpose ; I often dropped in to see him. *- f ■ j. Q« Did you go there for the purpose of endorsing the cheques? A. No; for myimorea- »lon was that they would settle i he matter of $100,C00 between themselves, and I was surprtsod wheu I was asked to endorse tht cheques, li. You understood taat Mr J. Chrysostdme Langelier would pay the money direct to Mr Pacaud? A. They haaud has cost you $115,000 ? A. Well, if you like to put it that way. Q. That is about i i ? A. That is about it. This opinion of Mr. Arrastrong seems to have been shared by Mr. John J. Macdo- uaid, who, being heard as a witness, declares that while negotiating with respect to the same matter he had figured from past experence, that he would requiro $50,000 for Mr.,Pacaud during the progress of the works, and that he cousidered Mr. Pacaud as a necessary agent in dealing with the governmeiit. Witnesses show how Mr. Pac:t d used part of tho $100,000 received from Mr. Arm- strong under these circumstances. On the Gth July Mr. Pacaud had to the credit of his account at'the Union Bank the sum of $1,550 ; on the 10th July he deposited three cheque.i of the government commissioner, Mr. J. Chrysostfime Langelier, to the order of Mr. C N. Armstrong for $20,000 each, making in all $60,000. On the 11th July a note of $3,000, to fall duo ou the 14th August, was paid — a note for which Mr. Pacaud and tho Hon. Mr. Mercter and others were joint debtors to the Union Bank ; as equal amount is carried to the debit Bide of Mr. Pacaud's account, balancing against the credit of the 6th July of $1,550 and $1,450 of the $60,000 above mentioned. On the same day, 11th July, a note of $5,000, to fall due ou the 13th July, was paid, for which Mr. Pacaud and the Hon. Well, that is the best way to put U perhaps, boiore as an Intermediary with the local government? A. he had looked after the payment of some subsidies for me ia him on these sub-sldies? A. An ordinary commission 2j per cent? A. I do not remember the exact amounted probably to $15,000, stretcheil os'er .•*!;il5J m 4fes^iiWv 10 — mmmm f Messrs. Mercier, Cha8. Langolier and others were jointly liable to the Union Bank: and equal amount is debited to Mr. Pacaud's account aj,'ain8t so much of the $<)0,()00 ! liove mentioned. Mr. Webb says that apparently these two notes were y)aid by che- ques of Mr. Pacaud drawn against liis account current at the said bank. On the 15th May Mr. Pacaud dl8(;ounted at La Banque Nationale a note signed by him and endorsed by Mr. P. Valliere for $20,000, guaranteed by one of the live chfiques of $20,000 signed by Mr. J. Chrysostdme Lanj^elier, government commissioner, and endorsed by Messrs. C. N. Armstrong and Philippe Vallit-r.'; the proceeds of this dis- count $19,732.60, wen; deposited to the credit of Mr. Pacaud's account, no other funds standing to the credit of this account; and on the same day, according to a promise made to the cashier of La Banque Nationale, when the above mentioned $20,(iOO were discounted, Mr. Pacaud, by cheque drawn against his account, paid a note to fall due on the 18th May, amounting to $5,000, for which he himself, the Hon. Measrs. .VI Tcier, Charles Langolier and others were jointly liable to La Banque Nationale ; the same day (luth M.ay), Mr. Pacaud bought, by a cheque drawn against the same account, a bill of exchange on Paris, in favor of the Hon. Mr. Mercier, to the amount of $5,000, which yielded 25,500 franca This note of Mr. Pacaud's for $20,000 out of the proceeds of which the two amounts of $5,000 were taken was paid for by the cheque oi $20,000, signed by the government commissioner, which was aimexed to iL As to the res{)eetive j)08ition8 of the goverjiment and the Baie des Chaleurs Rail- way Company, as originally formed or as re-organized, and of Mr. C. N. Armstrong at the moment this transaction took place, the investigation disclosed what follows; — 1. That the government owed nothing to the original or re-organized company for subsidies earned. 2. That the company owed no money payments to its contractor, Mr. C. N. Arm- strong. By his contract with it Mr. Armstrong was entitled to $20,000 per mile, pay- able, 1. by the subsidies earned ; 2. by the debentures of the company as the balance of the stipulated price. He had a right, moreover, after full coujpletion of the road, to receive one half of the shares of the company. All tue sul>8idie8 earned having been received by Mr. Armstrong or paid on his account, there remained nothing due to him Init the company's debentures. The company in settling Mr. Armstrong's account declined to state that the sum to which it amounted was "due;" it only siirned an acknowledgment to the effect that the claim of $298,943.62, "is a correct statement of estimates of work done and remaining unpaid," to show that this sum was not s^xigible in money. 3. That ilr. Armstrong so understood the situation, as he admitted in his evidence that the government was not resj^vonsible to him ; that if tlie govenmient had owed him anything he would not have consented to reduce his claim, and that in accepting in payment of his claim reduced, $175,00i3, subjec t<.) tiie condition of giving $UK),000 to Mr. Pacaud, he considered he had still made a good bargain. Mr. Prime Minister, I have not had the intentiontogive, in what precedes, a com- plete resume of the ft, cts revealed at the investigation before the Committee of the Senate, charged with the examination of the bill promoted by the Baie des Chaleurs Kailway Company in tlie Parliament of Canada. My only object was to point out some of the salient points of these revelations, which have caused me great alarm. I bring particularly to your notice that the moedia; 3. tl>e subsidy of 800 0(K) acres of land converted into money, and to appoint a commissioner to effect, with the approval of Mr. Thorn, or after judicial decision or award of arbitrators, the payment of ' e-tain debts of the railway, I find that the mode of binding the finances of the province by means of letters of •credit, without the sanction of the representative of the *■ rown, is prejudicial to the ^public credit This seems to me to t)e quite evident from the ste(>s which it was found necoseary to take in order to make use of the letters of credit issued by the 4'! 'ji'- > ■ . ■ — 11 — gov«raraent and the cheques given by it« delegate. The Uniof. Bank refused to dis- count the letter of credit for $10(),0()0, and only consented to hold it for collection. At La Banquodu Peuple it hecaaie necessary to attach to the cheque of the govern- ment commissioner » note of Mr. Fhilipfje Vallitire, and to give tnrongh Hon. Mr. l^angelier, a promise that a deposit of $.'.0,000 would be made out of the proceeds of the loan of |!10,000,lKX) (Diimoulin, witness), to obtain discount tr) the amount of $20,000. At La Banque Nationale it hecame likewise necessary to attach to tha clieijue of the government commissioner a note of Mr. truest Pacaud, endorsed by Mr. Philippe Valliere, to obtain discount for another sum of $20,000. It would appear that the government, when paying $175,000 to Mr. Armstrong, made a payment to a person to whom it ov/ed nothing and to whom the Baie des Cha leura Railway Company owed debentureiJ oidy ; that in view of the evident iuteul ol the Act 54 Vict., oh. 88, paragraph J., and of yonr declarations made to the House, the government, even with the consent of the company as re-organizod, should not have paid Mr. Armstrong any part of the $280,0(K) before the company had been entitled to them by works to be performed, the pretensio' s of Mr. Armstrong not coming within the category of the debt* of which the statute authorized tlie settlement before the sub- sidy was earned through works done; that when it paid Mr. Armstrong ttie sum of $175,000 the government paid it to the person against whom creditors of the class men- tioned in the statute were to be protected ; and that, at all events, the sum of $100,000 which went to Mr. Pacaud, has deprived by so much, a public enterprise of the subsidy granted it by a vote of ti»e Legislature. There would seem to exist between the government and the creditors of the pro- vince a barrier at which tribute is levied before justice is done to claimants. Under these circumstances, it becomes my auty : 1. To require explanations on this matter of the Baie des Chaleut.i Railway. 2. To request your concurrence in the appointment of a Royal Commission, con- tiisting of throe judges, authorized to hold an investigation, and to report upon the facts an! circumstances which preceded, accompanied, induced and followed the triuaac- tions entered into under the Act 54 Vict, ch. 88, in so far as it relates, to the Baie des Chaleurs Railway Company. I suggest that this cu nmission be composed of the H )n. Mr* Louis A. Jette, j idge of the '•uperior Court; H m. Mr. Louis Francois Giorge Baby, judge of the Court of Queen's Banoh ; and the Hon. Mr. Charles Prjers Davidson, judge of the Superior (yourt Until further orders T require you also to limit the ui'tiou of the government to acts of urgent admmistration, and I revoke tlie appointment of the Deputy Lieutenant Governor, matle uu'^.er the Treasury Act, to sign warrants on the Corisolidated Revenue Fund, under article 765 of tlie Revised Statute of the Province of Quebec, and I pray you to give aotice of such revocation to whom it may concern. I have the honor to be, Mr. Prime Minister, Your obedient servant, (Signed,) A. R. ANGERS, * V LietU.'OovemoT, References: — Record of the Department of Pubhc Works and Railways. Prot.'eedings oft le Committee of the Senate entrusted with the examination of the Bill presented to the Parliament of Canada by *•»« «"'« •'«« nhiii,»iira R^iiur>4v Company. the Baie des Chaleurs Railway (Signed,) A- R. ANGERS, LieiU.'Govemor, Cabinet dit Premier Hfinistre de la Province de Quibcc, QuKBix}, Sept 8, 1891. HONORABLB A. R. AnORR8, Lieutenant-Governor of the ProA ince of Quebec. May it Plrasb Your Honob -.—Your isecretary, Mr. J. C. Tache, handed me this morning about 11 o'clock the document which your said, in your letter of Sept 1 instant, you wen engagf»d in writing to me. I had only just time to submit it t>) my colleagues and I will draw up my reply as aooa as poauiblo. 1 have iuformed Jdr. 4 '■'i , aiiS|it:^5:'2aW^^ .«;cftVfci^(ii^^ m — 12 "t'^^iammmmtBfm ifi-. .1'*.. •V lerk of the Excutive Council, that you were pleased to revoke tfa« powers conferred upon him to sign money warrants. Pray accept the assurance of the high consideration with which I have tlic honor to bo, Your Honor's most humble and obedient servant, ' (Signed) Honokb Mkrciek, Prime Minister. Cabinet du Premier ifiniHre df. la Province dc QnSbec. t QuKBEo, Sept. 15. HeWOKABLB A.. li. Angeks, LieutenanirGovernor of the Province of Quebec. Sir.— I have the honor to forward you by my secretary, my reply to your letter of the 7th instant. I have to go to Montreal on Thursday, the 17th instant, to oi>en the exhibition, and I weald like to leave to-night or to-morrow for Montreal However, I am at Your Honor's disposal, and I would be obliged if you could lot me know during the course of the afternoon wliether I can leave. 1 will return on Friday, the 18th inflt, in the afternoon. Pray accept the assurance of the high consideration with which I have the honor to be, Your obedient servant, (Signed), HoNoBfe Mkkcibb, Prime Minister. Cabinet du Premier Miaiatre de la Province de Quibec. Quebec, September 15, 1891. May it Please Your Honor : On the 8th inst I had the honor to acknowledge the receipt of your letter which I received at 11 o'clock in the morning and dated the day before, reei)ec.tirig the question of the Baie des Chaleurs Bailway and to state that. 1 would reply to it as soon as possible. This 1 hasten to do to-day. Your letter concludes as follows : *' Under these circumstances, it is my duty : 1. "To require explanations on this matter of the Baie des Chaleura Railway ; 2. " To lequest your concurrence in the appointmeat a Koyal Commission con- «ii9ting of three judges authorized to hold an investigation and to report upon the facts and circumstances which preceeded, accompanied, induced and followed the transactions entered into under the Act 64 Vict., chap. 88 in so far as it relates to the Baie des Chaleurs Railway Company ; " I suggest that this commission be composed of the Hon. Mr. Louis A. Jett6, judge of the Superior court; hon. Mr. Louie Frangois George Baby, judge of the Court of Queen's Bench ; and the Hoa. Mr. Charles Peers Davidson, judge of the Superior court. "Until further orders I require you also to limit the action of the (lovernment to acts of urgent administration and I revoke the appointroontof the Deputy-ljieutenant- G<»vernor mude under the Treasury Act, to sign warrants on the L'onsolidated Revenue Fund, under Arti(;le 765 of the Revised Statutes of the Province of Quebec, and I pray you to give notice of such revocation to whom it may concern." My colleagues and myself have decided to comply with Your Honor's request and limit our action, until further orders, to acts of urgent administration, and 1 have communicated Your Plonor's order to Mr. Gustave Greuier, clerk of the Executive Council. It only remains for me, therefore, in order to fully comply with Y''our Honor's desire : 1. To give you the explanations you ask for with reference to the Baie des Cha- leurs Railway. 2. To consider your suggestion with reference to the appointment of a Royal Com- misson. I understand that Your Honor wishes to have the explanations before discussing the appointment of a Royal Commission, and I, therefore, purpose in this letter to oonfiue myself to giving such explanations and afterwards, if you desire it^ consider the second question . I had called together tho Council of Ministers on Wedn jsday. Sept the 2nd instant, immediately t^ter the vacation, in order to get the necessary explanations with refe- <^Ti '':^ m ''i^tmmssi^^ 13 ^ e I- reiice to Uiis ijiatter of the Bai« des Chaleurs Railway, w hid i >K'CurreJ daring my ah.senco, and tny oolloagues and myself had on lluit occ. 'ion dfu.idod to advise you to convene the Legislature within as sliurt a delay as pnHsihle. The ret oipt of your confi- dential lettt^r of the Sept. 1, iuHtant, induced ine to 8uspt?tid all further steps until I had received the document which yon mentioned in it. The inf rmation received from my CfJleayiuea, and the fact« stated in Your Honor's letter and before the Senate Investi^ratit n Committee, place me h: u p.-yitiou, J think, to fully understand the whole of the transa-'tion. Of course, in .speaking of the investigation by Ihe Senate, I do so withou*^ admit- tiuji either the jurisdiction of chat body in such matters or tiie jnst'ce jf its proceed- ings; for me it is a matter of public i;otoriet;y and nothing more. This is how I ton,sider I should snmmari.".e the tran.saction. The liailw ay Subsidies Act passed last se.ssion (64 Victorin chajiter 88) contains the following section : j. To iiirt in iMimix'tlng and i;(juipplni: f he Ba'e dex (dialeur.s Railway, tluouffhoutjitfi whole length, loi lUi pari iiKt w)iuui''',(*e(l, aud thai. U'lt Hnlslieil, nboul so niili.-s, gi>itju t,o or iii'ar Qa.-|.<> Basin, a Hub.->i(l>' of .0,0 acres of land per hoc, not ic> exci'ed in all S'W.O 0, payable to any pi rson or inisrins, company or el a)td others, shareholders and directors of the Raie des Chrtleiirs Railway Company, liiiding tlieni.selves unable to continue and (ini.ih the work of construction, notwithstanding the laryo nmounts tliey liad already received, made over their rights to certain persons who succeeded them, both as shareholdera and as directors of the company. These persons are ]\'essrs. .James t\)oper, Alexander Evving, James Williamson and Angus iM. Thorn, of Montreal, and .1. P. ['awes, of Lachine, who are known in the lousiness world as wealthy ca,{)italists who are per- fectly able to succes.sfully carry out the undertaking in ijuestitiu. Having settled with Mr. RobitaiD.e and the others, the new shareholders handed over to the Uoveriimeni. of the Province, after lengthy negotiations, the do(;ument bearing date April 17, ISiM, which is reprodiu'ed at length in the order-in-council No. 237, of April 23, 189J, hereinafter cited and by which tiiese conditions were accepted with some slight clianges. The following is the text thereof: Copy of a report of a committee of the Honorable the Executive Council, dated April 21, 18!)1, a])proved by the Lieutenant-Governor on April 23^ ISOI. No. 237. Concerning the Bale des Chaleurs Railway. 'iiie Honorable the Commissioner of Public Works, in a report dated April 20th jnst, 1891, sets forth that he has received a letter from Mr. Angus M. Tiiom, of date i pril 17th inst, reading as follows ; Quebec, April 17, 1891. TC HONOB.\BLB P, GAKNKaU, Comrnlf-sloner of Public Worlis and I'cemicr ad interim : SiH,— Wp are in a position to Hecuro the traof'fo'." vf the charier of the Bale d«a Clinleurs Railway i f llie following \>roposlii()n Is 8ccei>ted by llic Uovcrnmcut ; the company , nitdor the m«na>;cment of a new boa d of directors, will t)e pr"pared loftoiin wUii the works, couipjetu the road and have it ready for traflflc on or before tl)e .31 De^embdr, J892, from .Matapedla to PHHpcb ac, arid then toGasptood that liie Oovern men t shall pay the company : 1 The balance of fb>- subsidy granted by the HtatutcR of Q,uebec 45 Vic. cl). and Itt amend ijri en t«. and 61-52 Vic. cnap. 91, sec. I'i, amour. linjf to Siieo.OttO, -o i)e payable as earned, 2. 'Ihe snbs'dy of $,5t),UtO, granted by the statute ot laai 8es>ion, 5-1 Vic. chip. ^S !0 acresof land Rrantedby the slaiuie of'las' se^hlon, 64 Vic. chap. 83, see. 1, sub-sec. J, shall bb converted and the pro- ceeds I hereof shall be used by theGoverntneut to pay the leeiMmate and i-rivlletjedclairns, iaa •- cordancu with the above cited act, now existing asaln.'^t the road or agaiust the company ; and if m •I -•'V 3 ■I — 14 I ^i,' Yl tiny fiitrplxiB »bi)\i\d exitii adPT i»»e payment by tb*!GcvnrHrnentofuII claims nowexisitingHgainfet ihe l'ui^i To&a oh aJo/osald. 8ucb f)urplu8,lf uny.sball go t<> Ibt^ nuw cuinpany on tloa) t>titlle- m«nt. Tlie said dtbtfi and claims ai'trr tbey (-ball b>tve bt-^n approved at d 'lertified by Mr. Ti-> , sliall be t'Bki by a pertJon aprointed by th*'^ O'lVfrnint'ui for liiai purpo-t- and fulling Dt. oi arbiiraior'8 report In favor of any claimant,. W h'loorr ap)ioli.ti.'d by iho GoverninentHhall acoep' a claim huu Mr Thorn rofuitt'M bl« otrlllUaie Knd apprirbaib n, tben Iti eacb case tbo clainiuul b h an absolute rluht to xu arji'ratl< n, aid :ht» decision of Ibo arbltralois shall then Kinlethat tbecosi,- liicuned i-bHl) be paid li> lb" iiarty agaln^t whom tlu-doclslun is given. It Mr. '!'> oni fall toappolni nnarbiTHior Hficr liilays' notice to to do, the comroi^Klttn^r may then pay tbe cltiin, and hlfi action t>ball be binding on all puribH ■A« a njuarsntee thai tli(»y will go on with the works, build, compute and run the rond.tho company will dep sit. with ih(? 0< verument bonds of tbe ao ual emission to the amootit of five hundred ibousand dollars iJl'^OO,' 00;, wbh-h ^hull b<; exchuugnd for an equal nnaoniu ot ootids ol another issue of same amounr and value in cjifielhe < ompuny would aeem propi-r lo caiirel the Dresent issue ».nd replac it withothorsorotlicr satisfactory .security in lieu i,h Moof, it t^eiau dlstincily understood that he company will be liandttd back the hoods or other see urlty so dep* sited on the coniploi Ion and suilicl«-nt equipmcni otthe road to I'a.-'pebiac. The board of din ctorsoi I lie e*>iTipany under ihe new organization shwll be coninoNed as follows .—jHmesCoopir, of Montreal; J. P. [>awes, o( Lacliine; s lexsnder Ewlnkj, of Monirea' : James Wllliamst)n, of Montreal ; Angus M. Ihom, of Montreal, and two oiher persons to b© na^ed by Die Government. On the sixty miles of the said road comprist^d botwecn Metapedia and the big river Cascaiiedia. the company will res^ume Iho works as soon as th''V can t«ke possession of tjat section, and on the forty miles tndlng at Pa^peblao, surveys will be comn enctU as soon as the present profKjsidoD Iw ace pied, and the works will proceed with the utmost dillgerce. The whole respectfully submitted. gigned A. M. Thom. And upon the suid A. M. Thom, and the persons in the name of whom he acts and whom he represents obtaining a transfer of the rliarter of the Baie des Chaietirs Railway, and seeing that the jierHons mentioned in the propositions above cited iiave the necessary means to carry ont the enterprise, as requireti by the statute of last flession, 64 "Vic. chap. 88, .section 1, sub-section I, and sgiaing t'^at it is in the interest of the Province to accept it, the Honorable Coumiif^sioner of Fublic Works recom- mends tliat the said proposition be accepted as follows, tliat is to say ;— - 1. To re-organize the Bai»i dca Chalenrs Railway Company. 2. To construct and put in operati(»n ott or before December 31, 1892, the one hundred miles of the said railway comprised between Metapedia and Paspebiac and the remainder as fur as Gaep6 P.asin as soon as circumstances will permit 3. To continue the works on the 60 miles comprised between Metapedia and the river Grand Ca8<>apedia, as soon as the company shall be able to take possession of this part of the road, that is to say as soon as the claims which are not contested sball have been paid, which shall be done at the diligence of the Government between now and May 10 next at the latest, but without recourse against the Governmenl. in default of such diligence. To commence the explorations upon the 40 miles betw een the river Grand Cascaiiedia and Paspebiac as soon as the proposiiion shall be accepted^ and push them on with the utmost dispatch. 4. Ti'at the drst board of directors of the said company shall be composed of the folloMing persons : .lames Cooper, of Montreal ; ,1. P. Dawes, of Lacbine ; Alexander Ewing, of Montreal; Angus M. Thom, of Montreal; James Williamson, of Montreal, and of tMo persons named by the Government. 5. To deposit as a guarantee in the hands of the Government $500,000 of debon- urt^s -, chap, 88, section 1, snb-w^ction J, con- verted into njoney, w:iich snbBidy shal! be kept bv the Government and employed by it to pay the aftual debts of tiie Kaie des (.'hiJienrs Railway; and the s-irpluH, if any, shall be, afU^r tlio payment of all ilaims aetnally existing a^zainat the compiiny, kept by the Government, whirh shall renr'er an at count thereof to the company in final eettlement. That the «aid debts and claims, after they s'lall have been approved of and certi- fied by Mr. A. M. Thorn, reprea^-ntinj; the (•omj)any, shull be paid by a person named for that purpose by ilio Govcrnnient, and, in default of such approbation and such certificates, they shall bt- paid upon a judgment or repi>rt of arbitrators in favor of ar.y claimant. In the case of the commissioner named by tlie Governuient accept- ing a claim and of tliesaid Mr. Tiiom refusing Ijis eertitiraie, then and in each case the claimant shall have an abs(jlete right lo wn arl)itralion. and the award of the arbitrators shall then declare that the costs shall be at tlio charge of the party whfr shall fail ; and in :. i.:-W'.>- .y''::it:J.:IkltA'.^- :\-/i.iVni'y,M:fMl''Mi- ■V.'M~;^^f' -•?''■ S.V ..nh'Siiim'fyidiiiksi&k^&i-:r.:\4.lM?u>^^ lUlfJ^ iMli^SSli^, — 17 — ■■ . Qttbbco, April M/lsm . J. G. LyiKGCLiBB, Eaq , Qa«h«3, Dear Sie,— In %nHW«r to yoarf o; 28rd Inxtant, tratiRiniUtngr for my approTftI ihe %crontit of 0.«N. Armotiong, K«q., ngalnRt the bai" cSes i halmirK liallwav Co , to tb" Hroounl of $29>^,- 943.tJ3, Ibeg^ostate iha. T rotus** to approve nnd ct^rlify 'hat acooun' for more 'ban on* hundrpd and wevent' -five ihonsnnd dullari 1317 ,0 OJ *u<' tbls ou lli« Pxpn-iH ccnidlljon thai. Mr. Armatronj. sinll cant '!l and nnurl IiIk o uinict. wltb company and si nil give fur and abH( iut«' dlMchiriife >f any clalra^j whatavir aguiust the road or anyiblng up- pertaining to It, direct ly or 1 ndin clly. Yours, very truly, [Slguod] A. M. Thoh. What was Mr. Langelier to do undb? the circumstances in virtue of the two ordera-in-council above mentioned ? Fie found Limself confronted by a claim of Mr. C. N. Armstrong, not against the Government, but against the Baie dos Chaleurs Railway Oompany, a claim admitted by the latter in full, approved to the amount of $175,000 by Mr. Thom, acting for the reorganized company. He had no alternative but to pay. This he did on receiving the following receipt : I, Charles N. Armstrong, contractor for the conslrnctlon of the Haie do» Ohaleurs Rail- way, do hernhy grant a full sind coraplHte di-charge and aniitanoo to tho Bait* ties Oba'ours Railway Company of clLa 'd evry ilnim of wliaisoovor niture and kind which I oave or may have against the 'aid c>mpanj and I (u'ther agree to ofi> cal and annul and I do hereby cancel and annul the contra assure the r.onstniction of tlie road, and the citations which Your Honor has been t;ooil euougli to make in your letter of the words which I pronounced on tlie suliject on various occasions, sho.^ed that I was hut the interpreter of tlie wislies of all the meml)er8 in recommending that further sacrificeB be made for that object. This roawi) Lands and devnlopiiig colonization. Its rivwrs and its lakes teeming with rish .ittract a huat of wealthy people who pass the summer there and spend a considerable amount of money The construction of this railway which was so ardently desired had been arrested for two years by the irapotency of the company and its notorious state of insolvency i^ '.«^ir-.^^ 18 — And as it« shareboldors and diroctora refused ta jrivo nptheir chartera to persons who were able to finish the work, the (Tovernment thoni^lit proper last session to get itself authorized to cancel the charter of thiacoin'Mi ly, amuuirat otliers, if it vere necoasary. I am convinced th.it if this powfir h.u. -lot been gi^'tni to the Executive by tfio Lej.'islatnre of the Province, tlie old shareholders and directors would never have con- sented to make over their rit^hts tt) Mr. Cooper and the others, and that they would have remained as permanent and insurmountable obstacles to the construction i»f the railway which was admitted to he in the pa bhc interest, and for which the Parliament of Canada and tlie heijislaturo of (Quebec had already made such great sacrifices. Fearing that their cimrter would bo cancelled together with all the inevitable and legitimate consequences thereof, Mr. Roliitai lie anroceedin^8 of the Senate which have had the effect of causing a loss of valuable time for the chief parties interested, and of greatly hamper- ing the progress of the undertaking. I am further fiersoually informed that the company employs 450 mei in addition to its staff of engineers. By the purch ase of powerful lamps it has placed itself in a position to push on the work day and rght. It has repaired the first 60 miles of the road and put them in running order. The section extending from the (lOth to the 80th mile is under construction, the work is far advanced and will cortiiinly bo finished this year unless there is excep- tional weather which it is impossible to foresee. '!^/ie rails for that section ha\e arri- ved at Point lievis and are being shipped to the line. Cf^ntracts have been made witli the Dominion Bridijie ('ompany for all the metal bridges on the 20 miles and they are being prepared. Temi)orary bridges have been built everywhere, oven on the Grand Cascapedta, until the metal bridges can be p\it up. The stone piers of the latter bridge are well advanced. The company has deposited $200,000 in the bank to pay the men and for the materials it may require, and it will carry out it.=} contract in full. This information is confirmed by a letter of liev. Mr. Gagn6, cure of Maria, which reads as follows : Q,OBBKc, Sepv. (), isw. HoNOiiABLii, HoNORK Mkrctkr. Prime Minister. Sir ; I wenl to-day to yoar ofHoo to soeak to you but I was unable to see j^ou as you were at the council. I havtj very good nows tot ears. When I let'l Maria on \\i'4. 24. 1 was told that the work on th*^ rail way was heiuK aotively pushed on; that 400 or 50i) men were at worK. I saw the conlra<'tor. Mr. Hogau, who told m*^! that the locouriiittvt' would run, this fall, to the end of the 20 miU>s under constructton. I also heard that the laborers were paid regularly. I heard no com plaints. . . . I have the honor, etc., (Signed) J. Qaqnb, Priest. As regards the probity of the transaction, in so .^ar as the Government and the the compatiy are concerned, it is beyond question. You have before you, to convince you of it, all the facts set forth in the records to wliich you refer, and Vou have, especially, the evidence of Mesjsrs. Cooper, Thorn and Lonergan, who formally declare that everything was ^tri('tly done on a ruisiness ba.si3 only, and tliat tliere was no intermediary between the Government and the company. Mr. Armstrong even declares that the Government effected the best possible tran- saction under the circumstaucos. Mr. Cooper, the president of the company, says at page 195 of the Senate report on the investigation : By the Hon. Mr. L'angelier — " During the negotiations which took place between " your syudi jate and the Govorument of tno Proviuce of Quebec, was i*< insinuated, or — 19 I « «> i< " iutimaUHl, or hinU^d to you, diroctly or indirectly, that you should have Air. Piicaud " U.) approach the Governmont of Ciuebeo? A. No. " il Of wJ);i.t nuture have beeji ^our Tiegotiatioiis or traiiBactioiia with the Quoboo " Govermnont in .rouiiectiou with ilnn ti^iireouienf' Was th«irt3 any V)oudhng, was tliero " anytljin'T iniprofHT in these nev'otiations? A. I have no kuowlfnlyo of it- " C^ Tlie whoUi tiling thou wa.s coiKiucted in a l)U.sine.s8-Uke manner, u.s between " huftiiioas men and husineaa nion ? A It waa. Tiio undurstaniliii).^ I had whh that the " roud wiis t the ' road and onild it. i had tvvc» ohjeota ; one was to secure a debt I was afraid I wart going ti> lost!, wliicli aniouiited i>erHoiialiy anil throngii my ccmiootion with the firm of Cooper, Fainuan ifc Co., to .7i-".-,(HJ0 ] Haw it whh going to be lobt l>y litigation and wreciiing, \\';\l the road had bo'-n hdt in a shajx) for a y< m.d a half whioii was very ba 1, and tlie rolling stock u hicii i had iuruinhed to tiio load vvaa lying exposed to all weathers, Buinnier and wint<>r, and I had [)aid my money for that Htuck, and never got a ^.(Mujy for it I felt that litigation wa.s going to ruin the whole ohancn of getting aay- " thing ont of tliat debt. I uruaie it is I shall exuleavor to reorganize a symliuate to take it over. 1 would "- never have tak'm that step except on these conditious if you Iiad given me the road " for a prcsiuit. i would not be identified with all tias scaiidal and disgrace, such as " a])j)oars in the pa]:)er8. By Hon. Mr. Miller: " Q- What do you mtian ? Do you mean the Pacand scandal? A. T mean that " all tliis scandal is detrimental t j my success in carrying the work through. The road " is going to be short. Mr. rhom, secretary and direi.'tor of the company, says at page ISO — (By Hon. Mr. Langelier) : " Q At tiioae several interviews which you had with the Government, was Mr. " Pacauil's name or anybody else's name mentioned or liintod at by any momijer of the " Government ? A. 1 do not (piite understand your (luorftiou. " Q. Was any name mentioned as V>eing the name of a party to whom yon should " speak, or whom you should approach? A. Never, '* Q. Y(nir interviews, if I understand you rightly, were simply bu.siness interviews " and solely with the Government, such as might take place between business men. " A. Certainly. " Q. Business men who want to do an honest transaction ? A. I think so. " (I. When you settled with Mr. Armstrong, did .Mr. Pacaud see you about the "settlement? A. No Sir. " Q. Mr. Pacaud never saw you ; you were not askecl by Mr. Pacaud to settle with " Mr. Armstrong? A. No; during all the negotiations I do not think I saw him more " than twice, once in New York and once in Quebec. " Q. Did he make any propositions as to his getting something? A. Not any. " Q. He never .spoke to you of that? A. I spoke to Mr. j\icaud at various times " after the l)U3ineSiS was conch.ded with tiie Government. J)uring the progress with " the negotiations 1 never had any interview with Mr, Pacaud. This is what is stated by Mr. Lonergan, pagT 222: — (By Hon. Mr. Langeher.) "Q. You must have lieen aware of all the negotiati.uus, which have been going on " with the syndicate which took up the company and the Quebec Government ? A. " My clients informed me so far as they might have thought it necessary to the advice " I might give them. " Q. Did it come to your knowledge that any improper transaction or proceedings " were going on, or were to take place, between'the Government of Quebec or any of " its members and the 8yndi(!ate? A. Any knowledge of that kind which I have is " derived from the proceedings of this committee. " Q. Yon never heard of anything improper before? A. No. Finally, Mr. Armstrong sa\i;>, page 2i'l, : (By Hon. Mr. Langelier.) " Q. Am I to understand that your claim of $298,000 wah a genuine claim or a " bogus claim? A. It was a perfectly geimine claim, and, in fact, there were some «• items that 1 did not get into it j.\3 .1 ' 'i* I -*i' 20 w " Q. 80 that yonr claim waa not a put np job, but a legiHmate claim against the " company? A. Yen, and approved by every olRcinl of the company, and cannot be " denied by anybtxiy. " Q. IIa>l the Governme .l anything to do with the settlement of the claim ? A. " Nothing, whatever, excep)t the payment of the amount. " Q What you had to pay to Mr. I'AcUnd wiis not for setthntf a claim against the " Government ? A. I haii no claim apainst the Govorntnonl ut ull. " Q. What you did pay to Mr. Facaud must have been paid to nettle year claim " with the new syndioat* V A. It wua my claim against the company The new syn- *• dicate did not exint " Q Do you think the Government, paid too niuch to the company for doing the "work they have undertaken Y A. No, 1 tliiiik it wa.H a perfectly good business " arrangement. " Q. bid any member of the Government, dircctlv or indirectly, tell you or inti- " mate to you, or hint to you that you aliuiild apply to Mr. Pacaud to j^et a settlement " of your claim? A. I nover had a word to say to any member of the Government. " Q. You never saw any member of the Government with regard to the stttlement " of vour claim ? A. Never. '' Q. The settlement took placo entirely between you and the membe'-s o* the " comnany as reorganized ? A. With Mr. Thorn ; he was tlie party who aC^ed for the " syndicate." It resnltfj from the above that the nego 'ations between the Government and the company have been conducted in the most regular and honorable manner possible, on a husinesH basis only, and that nothing has occurred which can, either directly or indirectly, give rise to suspicions as to tiie perfoiitly honorable character of the trans- action as regards the Government and the company. Moronver it is quite evident that w-ithont tlie l*acaud-..\rm8trong incident, no one would have dreamed of making tiie sligtitest insinuation againafc the transaction. This Pacaud-Armstrong incident is very regrettable, and it is my duty to condemn in the severest terms the extraordinary bargain made between these two parties, and if my colleagues or myself had had any knowledge of it, all ne;^otiations would have ceased. And it is doubtless l)efause they were convinced of ti is that those gentlemen 80 carefully concealed their transaction and kept it entirely secret when it would have been so easy for Mr. Armstrong to inform the ministers or some of them of the exac- tion of which he was the victini. Yonr Honor sums up the evidence given before the Senate Committee with refer- ence to the use made of a portion of the SlOO.OtX) by Mr. Pacaud, and seems to think that the notes paid by Mr. Pacaud were those made by him, and endorsed by the Honorable Messrs. C. A. P. Pelletier, Francois I.angelier, Charles Langelier and myself. In this coimoction, it is important that Your Honor should not lose sight of the fact that although the above mentioned persons were jointly and severally responsi- ble for the payment of tho notes, as endorsers, Mr. Pacaud was the sole proraissor : that the proceeds of these notes were not intfuided for personal purposes nor for pur- l>o8es connected with the politics of the I'rovince of Quebec; but that, with the excep- ti.n of one or two of the notes, were to be used in making the necessary deposits for contestations of Federal elections, for ct)unter-potition8 and disbursements which might become necessary after the Dominion general elections of March, 1891- As regards the proceeds of one or two of those notes which I have just excepted, they were disbursed to pay some expenses incurred during tlj« said Federal elections, for tho benefit of one of the political parties to which tiie i)ersonfl whose names were on tho notes belonged. I had endorsed these various notes in blank when I started for Europe in the early part of last March, and had handed them to Senator Pelletier for the purposes above mentioned. This is clearly shown by the evidence^ of Mr. Pelletier before the Senate Commit- tee, pages 150, 151 and 152. " By the Hon. Mr. Mclnnis — Had they anvthing to do with the Bale des Chaleurs " Railway ? " A. Not in the least, I am willing to answer, aowever. I thought Mr, Barwick " •aid this morning that the proceeds of those nr tws mn^ \j$»d t© l»y tb» debts of Mr, " Merci«r, Mr. Langelier and m^nself. 1 J',. \) wwrnmn^PHs "■,•■„ ' ■■'■■■:, — 21 — '..■4." " Mr. Barwick — No; I said the proceeds of the letter of credit were used to pay *' Mr. Mercier's debts and yo ar personal ohligations, being the obligations on that note, " Hon. Mr. Pelletier — The proceeds were not used to pay my personal daAits. To " show you that they had nothing to do with the elections, [ will sav that after the oleo " tiotis were over, it was expected that a good many elections would be contested and a " good many counter contestations, and, of courso, nearly all lUir friends, whether olect- " ed or defeated, were interested, but had not the means u> fyle the deposits in the " court or in the Treasury' Department, as the law requires, ur notes, endorsed in blank, in case " we would rec^nire money to help our friends tnake these deposits. 1 ke|)t these notes " until they were required, and these amounts wore raised for a good many petitions " and counter contestations. In thu absence of Kr. Mercier we tilled up these notes, " endorsed them, and I never saw anything of them afterwards. They were placed in " the banks and used for making these |.)etitions and counter ct)ute3tations in the courts. ( " By Hon. Mr. Miller— Q. In whose hands did ti;is money go? yf "A. T never saw a dollar of it ■•^' •' Q. Then, how do you know how it was used? " A. My friends said they got it for tliis purjiose, as far as I am able to say. " Q. You believe it was used for that iHirpose? ' . "A. I not only believe, I am positive. " By Hon. Mr. Kaulbach — Q. How were they paid? " A. It was not expected they would have to be paid. Wo expected they would be " renew*^<^ until the contestations were over. " By the Hon. Mr. McCallum~Q I tliink you said Mr Mercier left these notes in " blank ; what are we to understand by that? A. I say ho end(jrsed the notes in blank ; " the amount was not put on. . • " (I Mr. Pacaud's name was not on it, then ? A . No. I had tiie l>lank endnraements ; " he loft me the blanks endorsed and wo filled up the notes afterwards. He simply " left the blank papt^^r with the endorsement on it. " By the Hon. Mr. Boulton. — Q. You say the amount was left blank? A. I say it " was a blank p'per on which Mr. Mercier had put his lUime as endorser in case wo " woul t want it- ' , , At page 23 of your letter, Your ^lonor says : ' " On the same day (May 15) Mr. Pacaud bought by a cheque drawn against the same account, a Dill of exchange on Paris, in favor of Hon. Mr. Meniier to the amount of $5,000.00, which yielded 25,500 francs." The evidence of Mr. Lafrance, tlie cashier of La Banque Nah'onale at Quebec (page 77-78 j, established that these $5,00000 were taken out <:if the proceeds of a n.ite of Mr. Pacaud's, endorsed by Mr. Valliere and secured by one of tbe cheques which Your Honor mention' On the othev hand, I am informed that this amount was raised by means of one of the blank forms signed by me which I had left with Senator Pelletier before my depar- ture for Eurv>}>e. i have not had an opportunity of ascertaining which of thene two versions is the correct orio. But in any case I alhrm that being in Europe and finding that I wanted that amount I asked for it, being convinced thatitcoidd be r \sed un one of the signed blank forms which 1 bad left, and of course witli the inteution of pajing myself the com- mercial paper employed to procure that amount for mo, aa it was for f)ersonal expenses. I further afUrm that when I asked for that sum, I was ignorant and I remained ignorant long after of the t!act that that transaction of the Baie des Chaleurs Rail- way l\ad been effected, and that I only heard some time after my return to Canada from the report of the proceedings of the Senate publishevl in the nowspaiers, that Mr. Pacaud had obtained a sum of $100,(X)0 or any other sura. At page 15 of your letter Your Honor mentions a conversation which you had be- tween .4pril23aud 2»3 last with Mr. Garneau, tha acting Premier, in which he told you " that strong pressure was being brouglitto bear pon him; that he w-as re- quired to do things whi-^h were rep-;jnant to him ; that ilireats wore made to him of cabling to the Hon.; Mr. Mfercier, and ho addeil that ho was inclined to resign-'' ■.mm^ ^^^nrmm^^^^ '■■*', I asked Mr. Oarneaii, my colleas;;n«, fore::pian.ati()ii8 on thia point and he tells me tJiat lio tliinks Your Jloiu.r givoH his uords protty exactly, b'll, tiiat without explana- tion tlif^ niiylit give rise tu a diflt'rcnt iiupression tiian that which he wished to convey. Mr. Ganu'au calls my attention tu the fart tliat ht< wan then actinj.; Premier, acting Treasurer and CuiiiuiHsioner of Public Works; that conrioquenlly he had a three' fold resfjorisihility, whicli CatiyruHd liini all the more Miut lie waa then ill, and that on the whifle ho disliked to elFcct tiie tranaai'tion notwith.stauding the string pressure bronglit on him to linish it until he had ol>tained Hatisfaciory security and the opinion of the Attorney-Gf)ner;il, v. hich inorecjver my colleaszue exacted as well ;is himself; bur t'lat as soon as he had Mbcaino.l the dei>o.sit of debouture.^ to the anionut of $r)00,000 bearini; lir.st tn<:)rt;j,u'j;e on t ho whole road, he feit nu)ro at his ease, an(^ thonirlit the traiisaithunt danger. Mr (.iaruHau even adds that he informed Your IJon'T of this at a 8nl)He(iaent interview. Mr. (Jarneau e.^pecially desires it to be known that in say i^itr that stron*.' pressure was being hrou^^lit to bear tai hiui he .lid jiot uish it io be uinlerfcitood tliat it vvas un- lanful or ur.aue jiress'ire; but th;it huviui,' iieen eni^au'ed in ne;.rotiations for several days with the new syndicate v, iihuut comiii>; to any cuucluHon, iie was at every mo- ment threatened by Mr Thoni, wluj represented the syndicat^\ tliat the negotiations would be broken off and ttie nuitter entin'ly abandoned, all the more so that his colleagues in the nunistry. who were t.-ouvimed that the transaction was an advanta- geous one for Troviiii e, told liim th.it it would not be wise to l se such an excellent opportmiity of assuring tW, constru'tion of the roavl within a short e Piekrk Garnkau, !'<)!i)rn.ssii>nef ol" riiliU.- Wn'ki?, Q.U''^pc. I fi'ar IO be dolaiiu-il lu-re iiy illnt's- I'msjnr than I tlrught. You may pmoeod io business in my ahscnee. r raiiTv in hUvuku' all vui will do in 'lin inaltt.r nf iho !}ai<^ doH Cbahmrs railway. Ijaui^olier will U'U you "xm-ilv wb.tt was dei-idHd upon ii»rort' Hid dcpirturo of Mr. Meieie'-. l am iulornu'd i!i;ii uiiy dviay in tliin mulli'r may bo pnjudicial to the luierests of the ouLcrprlse and of tli.>ught projjer to ask Mr. Robidoux un.ler wluit circumstances this despatch was sent, and his answer was that he Mas confined to his luviise by serious illness. During that illness, Hon. Mr. Garneau M.<:nt on two different occasions to see him and consult w'th hiiu on the j)riiicip,d matters then before the Calnnet. .Vfter conversing al)out the liaie des Chaleurs matter with .Mr. Garneau and discussing all the points, .Mr. Uobnhjux led Mr. Garneau to hope that he Would be vvell enough to be prosest at tlio mooting of the Cabinet, Vihich was to be held on the dab; of this telegram. April 17. On that day, .Mr. Roliidoux's health did not allow him to travel I'roin Montreal to Quebec, so lie sent the above telegram to Mr. (riiriiian. This telegram was tlio exf)re.'^sion of the opinion of Mr. Rol)idoux, who, from the information lie had derived either from me or others of las colleagues, thought it was important that the nuitter bo concluded at once to allow tlie reorg;i.nized company to commence work in the spring. Before reaching the conclusions of your letter, wliich I cited at t!ie beginning of this one, Your Honor n akos the following remark : "There would see ii to exist, between tlie (iovernment and the creditors of the Province, a barrier i.; which tributtj is levied belong justice is done to claimants." 1 am quito sure nut Yi-ur Honor lias not made this assertion without weighing the whole extent oi its heanng and, if you were convinced that such a barrier existed, it would be not only your right Init even your duty to assist me in making it known, in having it removed and pnmshing tho.se who might have set it up and made use of it for i)ersoiuil ends to the detriment of public interest. .\s for mo I need not tell you that I am ignorant of the existence of such a barrier. i I At page 26 of 3' our letter Your ITonor saya : "It would appear that t,iu> Uovf»rr»m >nt wlu.ii paylnsr th ^ $17.">,0''0 lo Mr. Artnstrongr. vnade a payment to n p'3rsoii lo whom it oivud nothian an 1 to whom th>' Bale il>'s Ohnlmirs Railway Company ow.-tl viebr'iitures only ; that, in viow of iiic ovid Mil. intent of thn Ad M Vic, cliap. 88, parai oomnniiv h4d heen 1 nlltlcd lo th-m hy wi.ik^ to hi-; perform' I, thi- prfiten- B.onsofMr, ArmMi'onB imi cottiIu^ \>lthui iho iMt.t-Kory of ihi debts of which lh<> stivtnte au- thorlzeil tlie Sftiientii', t>«f ir* tlio suhslily wa-* ftirupil ihioiijfh work donf^ ; that when it paUt Mr. Armstrong th" ■^nm of $17*).i)0> th ■ Govununynt pind it lo ilie pt'r.«on agiinst whom credit- ors 01 tho class m-'ntio'ied in ih ; staiuto wh-^rr- 10 ta p'oa'ci.ol ; and tliai , at all events, the .sum of $10),ii(V» which wwul u> Mr. i'lc nut has deprived, hy «o m-ich. n puolic enterprise of the subsidy granted It bj a vote ol ih^ Leirislaturo." I have already sliown that Mr. Annstronfj's claim had been adinitted by the company's engine'if. Mr. Light, and upiinvod by ttio former director.s to the amount of $2'JS,943.()2. I iiave also siiowii that Mr. Langolier, t!ie Govoriimentcoramissioner, was obliged t pay all tho cla- 1113 inadv^ a'.xiiinst tlie company and admitted by Mr. Thom as representinlisiicd by th.',', evidence of Mr. Light [page 105 j, and also bv that oJ' Mr, Armstrong 1 p 217 j and of Mr. Thorn [pi. 193 and H>4.] Let us lir-'' '..o Mr. Light's eviaence, the engineer of the Government and of the company. Tina is svhat he s;iys (page 100) " By JNIr. BarwicJN: : Q. J j-hice hv y.iur hand Exhibit 5, wlr'.ch is a statement of " account between tlie Baio des Chaleii'rs llaihvav (V.mpany and Mr. Armstrong with " a certificate of balance coming to Mr. Armstrong in actcordauce with the terms of his "contract. At the t'>p of the exhibit ar^^ a series of figures apparently baaed upon " certilicates of A. L. Ligiit; that is yourself ? A. Yes. "Q. And this document ori'_dnaUy conchidemaining unpaid V ' A. Ves." it is not necess;iry to cite Mr. 'rhom'.s evidence, 8in';e. after examining Mr. Arm- strong's claim, ho admits it, b-"t does not consent to pay it, nuless it is reduced to 175,000, as the whole lias been shown above, lint wiiile admitting the legitimacy of Mr. Armstrong's claim in princifile. Your Honor .Says tliat it is not exigible because it ■?.'as payable only, wlien the work was completed, in del)enturo.s. If 1 proi>erly uudorstan I Your Honor's prop >sition it reduces itself to this : Tho Gi:)vernrijient paid the $175,000 to Mr Armsirong to wliom it owed nothing and to whom the company owed only dolientiires afler the. exe-'utioa (jf the work mentioned in his contract; tliat no portion of the $280,000 represHuting the new suljsidy of 800,000 acres of land slionld consequently have been employed in payintr that claim, whicii was not one of those to be paid out'of that ajipropriation, and iinally that the $100,000 paid to Mr. Pacaud have deprived a public undertakin,' ..f s i much of its subsidy. Allow me to observe, in tiie rir.st place, that the Government did not pay anything to Armstrong, had nothing to do witii him, was never (tailed upon to acknowledge his claim nor to discu.ss it, and Armstrong himself never claimeil anything from the Government. All this is clearly shown by the citations I had the honor of giving ab(>ve. I admit that Your TLmor is right in saying that Armstrong's claim was not due and consequently not exigible because it was payabl i in debentures, when the works would be conipleted. Tlie.se are theexpros^ conditions of the contract betv.een the company and Armstrong. But this contract might have been changC/d be- tween the contracting parties, providing it was d»>ne without defratiect due to yb\i- opinion. In effect, I have shown it above. From the moment, that the claim wa.s admittcil by the I'onipany and that it whs certified by Mr. Tiiom, it became due and exigible and it had, under the terms of the order in council. No. 237 of April 23, 1891, to be paid by Mr. Langelier. It seems to me that I need not insist on this point; what precedes, as well as what has Just been said, is sutlicient. Finally, Your Honor says that the sum of $100,000 which went to Mr. Pacaud have deprived by so much a public enterprise of its subsidy. This assertion would be perfectly exact if these $100,000 had not been taken from the amount due by the company to Armstrong, and which the Government were obliged to pay, as has just been shown. But from the moment these $100,000 are taker, from the $175,000 paid to Mr. Armstrong under the terms of the act and of the ordor-in-council, it is not exact to say that these $10(>,000 deprive a public undertaking of so much of its grant. If Armstrong had kept these $100,000 himself ini3tead of giving them foolishly to Pacaud the position as regards the enterprise would have been the same. Allow me before passing to another subject to remind you that there still remain $310,000 of subsidies t^ned by Your Honor, it is stated that these conditions are fulfilled and the debts of the com- pany certified by Mr. Thoni sliall l)e paid out of tlu.s aniount of $280,000 by Mr. Langelier, the oommi.ssioner api>ointed for that purpose by the Government. As 1 have already stated, if that money liad been in tlio Treasury after Your Honor had signed that order-in-council, No. 237, the treasurer would only have had to a.sk for tl»e necessary money warrants and tiiey would have been issued. Now, as there was no money in tiie treasury at tliat moment, at least to meet this sum of $280,000, and as it was difticult to get the banl' tin- Kanque »lu I'enplolnSl. Feter-Hiretl of this dry to g«ii acheck or $2 .tOi.OO of Mr. J.CbryHoBtome liiiiigeU«»r, in bis quality of Government coinnuKSslouer, discount.ee, 1 hap- pen' d u> be K\ the liank iuctdenia'l . 2. I hai 1 had nothlnuto do, «lth'-r Jlrfctly or indirectly, wiih the dlsoountinR of the alcesaia ctje<,'k of $JO.0OU.0O ami tliat J was not 8olu;jted l:>y any one to asBlst In uottiug it discuiinted. 3. That on fliat occujiinn, Mr. P. B. Dumoulin ugain nsked nw-, what be bad already fre- queniiy asktd nu: to do. viz : to gel a Government dtp-jsll for life i)ran( h of wbieb be is (rushlor and that I would not bind myseU to unyiblug, telling him there and then tnal I wnuid wil- llngb do my best, but i bat ibe>e depoBlts rested wlihiu the treaburer, Hon. J.yhehyn; that no iiriirnlse wus ninde by me in Ibat re«|>i it. 4 Tbat 1 never made. eUbei by my own bandH or otherwise the deposit of $8,(00.00 raeo- tioned li: ibe depohllion oi Mr. V. B. Dumoulin before the fomraUtee ol Senate, If nowever, he dill make 8uch a Mtatoment, as mentioned in the newspapers, for I declare ib<.it I have not read his depo».ili<)n in i be otBolul report. .And I mukH this soiemt* deelar>ition, connclentlou.''ly l>olievlng the same to bo true in virtue o; the act rcopectlng ixtra-Judicial oaths. (Signed) Chs. Lamoelikk. Taken and acknowledged before me, at Q,ucbec, this luih day of September 1S91. , (Higned) alk :andbe Cuauvkao. J, S. P. I, Phillppo V«lli6re, of the City of Quebec, manufacturer, do solemnly declare ; That OD the woasion wnen I went to ibe Ban<{UO du Peuple, In S'. Peter-atreet, Q,uebec, in company with M •. Kmesi Paoaud, to get a check of $A ,(>i of Mr. .1. chrysostome l.,ai>g*>ller, In hi-, quality of (Government eomiulHsloner, dlHCOunttd, I met there Hon. Chs. Langeller who happened to be Mu-re by accident. T'.iat the -aid lion. Chs. Laiigelier bad nothing to do, either directly or Indirectly, with theMi>c<>untlng o( iliei'ald cber k. Tbat the fcald flon.Chs. LanKelier never promised to obtain a deposit of $;V»,noij nor any other amount in the Uanquedu "euple to Induce tne cashier li> dincount ibeafore^Hldcheck of j;2i,00i\ 'i bat I recollect tbat on tnatociaKi n, Mr. P. B. Dumoulin asked the Hon- (Jbs. Laugelier t* exert bis influence with the Government to obtain a et>t, but be did rer, 189'. iSTgned] A.LSX.INDUK CUAOVKAU, J.S. P. TEi-KonAPH. Montreal, Sept. 15. 1891. Hon. Honokk Mkroibr. Q,uebec. Leduo, Engineer, teleurapuH : Grading first 15 mlleH for track-laying pu- poses very for- ward, cutting and embankments left nurronr to flulsb bytra>n, works w^Il manueil, last Ave milea very light W' rk not touched, prlncipalli because contractor wanted loalli.w far- mers time to remove crops, and with xufliciont force that light grading would only take a few days. Masonry toundufiou and trestling at Qraad Cascapddia expect (Inisli In live wet^ks providing fair weuiher. Twt-nty miles rails landed at IjewH. ('ontitictor say? will do all la nis power wblle weathor Is favorable but would not promise to work a day nfier regular winter weather sets In; a» Toximate force this day, five hundred men, over hundred and Hi'ty hnrssa* (Signed) Jam&s Coopsb. ##f*'. 27 — Amount of the grant. ... $280,^00.00 Amount paid on account by Mr. J. O. Langeller, Comnalssloner to 1. Mr C N. AniiHtronjf .fUi.iOO.OO t. To ptty Dtivllfgi'd tlebls 414tKi.0(1 Mr. LanKt^ller had oilll In hand on Julv 11 a balance to be expended of 22.519.1T Tli«re remain Mtl II available In the Treasury a balance of 68,5port iirx n the facts and circumstances w hicli preceded, accompanied, gave rise to and folk>v ed the transactions under thie Act 54 Vict-, ch. 88, in so far as it afl'ecta the Baie des C'haieurs Railway Company. You say in your letter of to-day : — ."1 undcrarand that Your Houor wlnbes lo have the explanations before dlscuHsing the ap pelnlnjent ofuRiiyal Commission anil [ therefore purpcise In thl^^ letter, lo confine myHoL gWiuK such explanationK and aflorwardN If you desire it, consider the seooud question." 1 have considered your explanations, and I have to inform you that they are not of a nature to dispense you from tiie immediatt; consideration of the appointment of th« Royal Commission required by my lett(*r of the 7th instaiit. I reserve the right to reply in due time to the explanatory memorandum which you sent me to-day. 1 have the honor to be, sir, Your obedient servant, (Signed,) A. E. ANGERS, Lieutenant-Governofr afler- CabitKit dii Premier Miimtre de la Province Je QiUbcc. Quebec, Sept. 15, 1891. Honorable Ai'glstb Real Angeks, Lieutenant-Governor of the Province of Quebec. May IT Pleasb Your lioNoa : Your secretary, Mr. Tache, handed me this ■oon at 4:07 p. ni. your letter of this day in answer to mine, in which you say : "I have cons dered yonr fxpianatlona, and 1 have to inform you that they are not of a na- ture lodi.sptfuse you from the ImnKHJIaieeonBlderatlou of the appointment of the royal com- mlS8ton required by my letter ot Sept. 7 instant " I thought and I still think that an inquiry by a committee of the I^egislative Assembly would give better guarantees and ri^fht to advise you an regards the eomposition of that court, while >?uu^ ot your suggestions in that respect all the consideration they deserve. 1 am intJie council cliamber with most of my colleagues awaitiujj; any con .-nuni- CHiion Your Honor may be pleased to send nie Pray accept the assurance of tlie high consideration with which I have the honor to be. Y'our most obedient servant, (Signed,; HOKORE MEKCMER, rrinie Miniater. GOVEUNMBNT HorSE, \ QuEBKc, September 10, 1891. ) Honorable Honokk Mkkciku, I'rinie .Minister, Quebec Sir, — 1 have tin) honor to ackiiowledj/e the receipt of your second letter of yes- terday, i:\e 15th Se|)teniber instant, which reached me at iK'AO p. m., in answer to the communication winch my secretary handed you al)out 4 o'clock the same day. 1 notice with satisfaction that you renounce the project of haviug mi inquiry made l^y a committee of the Legislative Assembly into the matter . '" the lUiie des Chaleurs Railway, and that you acfiuies:!e in my reipiest to concur .:\ the ap^Mjint- ment of a R')yal Commission composed of three judges, with instructions toinvestigata and rep irt upon t!ie facts and circunistances which have preceded, accompanied, given rise to and followed the transactions, under the A(:to4 Vic , cli. 88, in so far as it affects the Bale des Jhaleurs liaihvay Company. I proposed to you is memljers of such commission, the Honorable Justices Jett^, Baby and Davidson. J beg you to let me know whether you have valid reasons of recusation against any one rf these gentlemen. I have the honor to be. Sir, Y'our obedient servant, (Signed,) A. R. AN(jERS, Lieutenani-Cjovernor. Cabin I du PuinitT MiniHtrc de la Prnv'ivct: de Qii^hec. QuKBKC, September IG, 1891. Honorable Avgi'sts Real AxoKfis, Lieutenant-Governor of tl»e Priivince of Quebec May rr I'LicASii Your lIoNou : iMr. TaCiht; handed me this morning at about 10 o'clock your letter of this day in answer to my last communication of yesterday. Your Honor says that I have actpiiesced in your request lu cvnictii ii. ihe appointment of a royal commission cojnposed of tliree judges, etc. Permit me to say that there is an error ni this. [ consented to the appointment of a royal commissi, Baby and Davidson, wh(jMo namea you auggetsted iu your lotter of the 7tii instant. Permit uie to say to Your He nor that, with all tho resjxM't I have for you, I under- itand, that my Uuty impoiies upjii me the obligation of otfering you my advici) on this occasion, and that it is for Your Honor to make known t*; mo the valid reumnt $f nai^utiini which ycju might liave against the judge or judges whom I might prop<'He. In claiming the exercise of this right, 1 rely upon the constitutional authoritioa and precedents, which authorities and precedents cannot leave a doubt in the mind of anyone whomsoever. I will merely, for the moment, recall one of the.se precedent*: that occasioned by what was called " the Pacific scandal." Very serious charges had been brought bcdbre the House of C»)mmons, by one of its members, against the Dominion ministers, and documents supposed to boar the signature of some of those ministtir.i had been produced in supjtort of these charge.*!. Sir John Macdonald thought propur to submit these charges to a parliamontary c tUom." On July 2, 1873, Sir J >hn communicated his decision to tlie chairman of the com- mittt^e, but, Messrs. Dorion and Hlake having refused to hold an inquiry outflide of a committee of the House of Commons and to form part of the profXKSeJ couimission, the Governor-General was a, and I have no meanK tiiert-fore, of aac^jriaiuinfi; tliat tho mayority of that body sub-criue to the opinion you have aunouuoed. Again, to whatnhouid J have tj appeal irijue^- tMaoattoD of my conduct ? it. is true grave charges have been preferred agiimst Ihe.^e gentlemen ; charges which I admit require the moHi searching investigation; but, as you, youri>eIves, r«mark in your memorandum, the trutli of these accusations siill remains untested Is the Ooveruor Oaneral, upon the strength of such evidence as tlUs, to drive from his presence gentleman who for vears have filled tho higtiest otnces of State, and i a whom during tho recent session, Parlia- ment has repeatedly declared its continued ooufldeuce ? It Is truK, certain dontimenis have lately appeared in connection with these matters of grave Blgniflcanco, in rej^ard to wtilch the fullest oxplanatioo must be given, but no proof has yet been udduced wuicb neoessarlly conneets them with the culpable transactions of which it is asserted they fortood apart, however questionable they may appear, as placed In Juxtaposi- tion with the correspondence to which they have been appended by tbe person who has pos- seased himself of them. Under those circumstances, what right has the Govern >r-Generai, on his personal responsibility, to proclaim to Canada,— nav , uot only to Canada, but to America and Kurcpe, as such u proceeding on his part must necessarily do, that he l)eiieve8 his minis- ters gulUy ol I he crl mos al It ged against them? Were It possible at the present time to mak^ aoallof the House, anu place myself in adirect oommualcatlon with tne Parliament of the Domin on, my present embarrassment would disappear, but this Is a pbysioal ImposBlblllty." •* Uentlemen. the situation we have been diicussing is one ol great auxiety and embar- rassmen^, bul loan not but hope that on a calm retrospect of tite various oouslderatlons to be kept In view, you wlii come to theconcluslcu that In uetermiolng to be guided by the advice ■ — 30 — of ray mlnUtorti, ou the pr uenl occa«iOD. tu other wordH, In Jecllntnn to act •« thonicb the ch>>rxcH which have baitu n'lvunc-tl atcaliiHt ttaoin were already pr>v«n. ( tiav; adopied the Aoiirae m Mtin accordancu with the maxima uf conattiuMoaal Roveriiment, and with wha' In duo ro ih(>8e whon the Parti ainHtit of Cai.uda ba^ recommeodod ttntion.s from the meuioranduhi itsolf whicli Lord DuffHrin sent to the Imporirtl Govoniiuent on August 15, 1H7;5, c\Un\ in the 7th volume of the Cotutnons JournulH at the pa^e8 mentioned. I'ennit me to add tliat, as resjarda the position of both Goverimients, there is not the slijrhtest similarity l)etween tlie case I have just cited and that of your a-night by the 10 o'clock train to return only on Friday afternod by law, it cannot be maintained that the Government han th«< power to amend an act by an order in council. If the Government intentionally submitttxi, for the approval of the ropre8»'n- tative of tlio Crown, this order in council, witli th^ miniHtorial advi<« that it be signed and the a88uranco tliat everytiiing was according to law, might not one be- lieve that the Government, with premeditate 1 intention, drew up ila roport so as to pay a creditor to whom the law jjave no claim? The ft88ur;ii»(« tliat order in council No. 237 was in accordance with the act 64 Vict, chapter 8ts, and had in view only tlie payment of the privileged claims of the Paio do8 Ciialeurs Railway Wiva ;^iven t > mo by Honorable Mr. Garneau, and thia is shown by the instructions the latter promised me he would send, and which he did send, to Mr. J. Chrysostome Lan>»elier, tho (iovernment Commi.s8ionor. These in- structions, quoted in my first letter, cle vrly show the n? press ntiitions mide to me by Mr. G.'irneau, when bo adviseii mo to .sanctiim that orler In council. At paiife 43 of your memorandum you say that Mr. Garueau admiU having had the conversation with m^ which I related with reference to the stronjj pre.ssure on him and about the fact tuat it was souj^ht to make hmi do thinifs which ne objontod t<». But 1. notice with surprise in your memoraudnm that the Hoi)oral>h .Mr. Garneau endeavors to give <^nito a different meaning to the couvers.ition from what it really had, by Kiving it to be understood that he, Mr. Garneau, was then alluding to the fact that, being at the same time (Jommu-jsioner of Public Works and Railways, acting Treasurer, and also actnig Premier, he had a trt)ble re- sponsibility which fatigued him all the more that he was ill and disliked to effect the f^nsactions, notwithstanding the strong preasure brought on him to tinish it. until he had obtained satisfactory security and the opinion of the Attorney General At the time of the interview when the conversation above mentioned took place, Mr. Garneau had the opinion of the Att-orney General althou>fh it had not boon fairly written out. There was no question whatever of the multiplicity of Mr. Garneau's occupations nor ofthe state of his health; none of these things would have Justified the worfls he m ide use of to me, viz; "that is was sought to m.ike him lo things that he "objected to and that threats were made of cabling to Mr. Vlorcier." Mr. Garneau then certainly alluded to unlawful and undue pressure, since I a Ivised him to resist and to act unconformity with the law. Neither his words nor mine would have had any appropriate meaning if there had been no question of unlawiul and undue pres- sure. 1 In quoting that portion of my first letter w here T say that there would seem to exist between the Government and the ereditors ofthe Province a barrier whore tribute is levied b-^fore justice i.s done to claimants, you ask me to make sucli barrier known to you. In that passage of my letter I alluded to oerta'.ix declarations made by Messrs. C. N. Armstrong and .f. J. Maodonald, which I will repeat for your information Mr. 0. N. Armstrong has sworn that, in order to obttin the payment of thes'jm of $17.5,000 iTom the Government, he was obliged to pay $100,00() out of it to Mr. Pacaud, to whom he had previously paid another sum of !j)15.(>00 in order to get from the Government some subsidies which were due to him. Mr J. i. .Macdouald lias sworn that, in his calculation with reference to the c^t of completing the Bale d'^s Chaleurs Railway, while he was in negotiation with the Gov'erumt^nt, he had, considering his past ex- perience, to put in $50/X)0, which he .\ould liave to pay Mr. Pacaud during the course ofthe work, and, moreover, thai he considered the latter a necessary agent with the Government. In conclusion, 1 wish b) add that I do not give up any of the points raised in my ietter of f le 7th instant, and that I do not admit any of the profjositions set forth in your memorandum of September 15 instant. 1 have the honor to be, sir, Your obedient servant, (Signed) A. R A.voebs, Lieutenant-Governor 'f 32 Cabinet du Premier Minintre dc la Province dp (/ii£hfc. QuKBEC, Sept, 17 1891. Honorable Auouhtk Rkai. Angbiw, Lieutenant-Go .-ernor of the I'rovince of Quebec, May it Pi-ka8e Youii Honor : 1 see by the Quebec otHoial report of the proceedinijf before the Senate of Cana(hi that on Friday the llth inst, Hon. Mr. 13olihic called the attention of the Government to certain rumors current in (iuehoc with reference to a ininiaterial crisis and asltod the IVinxe MiniHter (Jlon. Mr. Abbott) to be gi-'od enough to say whether any correspondence had passed between the Provincial Governtnei t and the Dominion Government or between the Lieutenant-Governor of Quebec! and the Governor-General of the Dominion on tlie subject, and that Hon. Mr. Abbotii ro|)iiO(l liiai there had been no corre,spondence between the two Governmenta on the subject, directly or indirectly, but Liiat His H(jnor thn Lieutenunt-(jovernor had transLiitted to Hia Excellency a copy of a letter which he had addressed to Mr. Mercicr, Trime Mini8t»ir at Quebec, and that His Excellency had transmitted thig copy to Ottawa. I also aco in the same ollicial reports that, on Monday, September 14th, inst, Hon. .Mr. Miller moved, seconded by Hon. Mr. Dickey, that an humble address be presented to His Excellency the Governor-General, praying him to cause to bo laid before the House all the correspondence exchanged between him and the Lieutenant-Governor of the Province of Quebec resi)eoting the Baie des Railway, as well as all other papers or correspondence on the subject in ■ession of the Government. 1 learned by despatch last night that Hon. Mr. Abbott had, during the course of yesterday afternoon, laid lieforo the Senate a letter from Your Honor to His Excel- lency the Governor-Gener.'tl transmitting him a copy of the latter which you sent me on Septond)er, 7tli, and th') Chronicle and the Canudien of this morning publish the greater ix)rtion ot tiiip document. Aa it would beotthe greatest injustice to my colleague.^ and myself to leave Your Honor's letter alone before the public witiiout my reply to it, I ask your permissiou to publisli the latter, as well aa all correspondence which has followed between Your Honor and myself on the subject, I will not give all the reasons v/hich justify my present step. that I have but to make the request and tiiat it will be granted. Please accept the assurance of the liigh consideration with which I have the honor to be, Your obedient servant, (Signed) Honobr MEKCxaR Prime Minister. Chalours the pos- I am convinced GOVBKNMKNT HOUSK, Quebec, September 17, 18W. HOKORABLK HoNORfe MbRCIER, , Prime Minister of Quo))ec. Sir, — I have the honor to acknowledge the receipt ot your letter of yesUjrday, 16th September, instant which was handed to me at 6 p.m. at Spencer Wood by your f)rivate secretary, with reference to the composition of the Royal Commission which orms the subject matter of our correspondence. I expressed to you my desire that such Commission be composed of three judges ; in reply you tell me that you are of opinion that it be composed of one judge only, and you suggest as Commissioner, Sir Francis Johnson, Chief Justice of the Superior Court . You aliege that the Royal Commission, which enquired into the circumstances connected with the sale of the North Shore Railway, consisted of only one judge. I would observe at once that this investigation was a very lengthy one and lasted over two years, while the enquiry at present in question can but last a short time. This, I think, meets the objection raised by you with reference tc the appointment of three judges, fearing that the administration of justice would greatly suffer by their absence In the second case, to which you refer, of the Royal Commission appointed tr investigate the Pacific matter, the Commission coiisisted of three judges. The Bale des Chaleurs matter presents at least an equally grave chara8t«r> "■ r\ ': 'f. _ 33 — T( you had had valid reasons of reouaation against Honorable Mr. Justico David- son, T wonld have beon natisfied to aeo him replaced by 8ir Franrig Joimson. In yonrlotter uf ITitli 8«>[>tenibor instant yon said that yon and your colloaji^ues were sotlesiroiis of moetin>» my viowa and havingfull and complete incjniry made into every- thing connected witli tliis Bale des Chaleurs railway ^anaaction, that you were pro- pared to consent U) the app(e facts and circumstances whicli preceded, accompanied, gave rise to and followed tiio transactions under the Act 54 Vic, cha{). 88, in so far as it relates to tlie Bale dea Ciialetirs railway. I find that going beyond the terms of your first acceptance of tlie Royal Commission, which I d^flned in my letter of the 7th inst., you now wish to extend the inquiry to the employment of every subsidy granted to that railway company since it came into existence. The words "every subsitly" would include the 8ul)8idies granted l)y the Parliament of Canada, and a <;ommif.sion of that nature emanating from our Provininal authority would be radically null, as our jurisdiction is limited by law to Provincial objects. Thus your new {)ropo8ition as to the extent of tlie powers of the Royal Commission would render the latter null and defeat the ends of justice. Under the circumstances I have to inform you that I refuse to accept the advice which you t^Mider me to constitute tlie Royal Commission gf one judge or ly, and to extend his powers beyond the terms of my proposition of the 7th Sep- tember instant and of your first acceptance. 1 ' I have the honor to be, sir, ,' ■ ' '. . Your obedient servant, (Signed) A. R, Anobrs, . • ' • Lieutenant-Governor. • . , I Cabinet du Fremier Ministre de la Province de Quebec. QuKBEC, Sept. 17, 1891. HoNoJiABi-B AiiauRTE Rkw. Angebs, Lieutenant-Governor of the Province of Quebec. May it Please Youh PIonor. — Your private secretary, Mr. Tach6, handed me, at noon to-day, your letter dated tc-day, acknowledging the receipt of mine of yesterday, in which I had the honor of proposing the Houble. Sir Francis Johnson, Chief Justice of the Superior Court, as sole commissioner, and to extend the powers of the com- mission to all subsidies granted to the Bale des Chaleurs Railway Company since it came in existence You persist in your suggestion to appoint three judges instead of one alone, and you say tuat 1 go beyond the terms of my first acceptance by suggesting that the inquiry be extended to the employment of every subsidy granted to that company sincQ :t came in existence. You add: "The words 'every subsidy' would include the subsidies granted by "the l^arliament of Canada and a commission of that nature emanating from our provincial authority would be radically null" This is not the time to discuss this question of law, but it would be easy to remove all doubt as to their meaning by adding to the words " every subsidy " the word "pro- vincial" Nevertheless, I will not specially insist on this extension of power, but I hope that Your Honor will acceJe to my desire in that respect. Allow me to add that, in making this proposition, 1 remained within the very terms of my letter of the loth instant, since I invited you to discuss with mo "fjio " advisability of extending the inquiry to the employment of any subsidy granted to "that railway company since it came into existence." I read the following in your letter : " If you had had valid reasons of recusation against Honorable Mr. Justice David- son, I would have been satisfied to see him replaced by Sir Francis Johnson." I cannot say wtiether I have reasons of recusation valid in law against Judge Da- vidson, for whom I have the highest respect. But under circumstances like the pre- sent, a regular recusation is not necessary ; certain rules of prudence and propriety shoald suffice. Mr. Davidson has not long been a judge ; when he was appointed he was active- ly engaged in politics ; had, on several occasions, presenter! himself as a candidate against my political friend'*, and occupied the honorable position — but one, at the :ir^:i:M'l / • ,, _ . — 34 — X same time, very significant with regard to hie political leanings — of president fore send you, for the purpose aforesaid, copies of the whole of our correspondence. I would beg of you to add a copy of your answer to my last two letters of to-day, is order that the whole may be produced, at the same time, before the Houses al OMawa. .■V '■vr:.:. ^ va^ _ 36 — Pray accept the assurance of the hij^'h consi(Jeration with which I have the honor to be, Your Honor's most humble and obedient servant. (Signed,) HONOKE MERCTER, ' . ' Prime Minister. "... - Government House, QtiKuKc, Sept. 18, 1891. HOKOKABLK HoNOKt MeRCIKR, Prime Minister of Quebec, Sir: In reply to my letter of yesterday sifjnifying my refusal to accept your advic» as to the extent and composition of the Re. al Commission which you proposeii to me in opposition to that which 1 offered, you state to-day that you are prepared to make the report required by law in the term? which I have made known to you, with or without the modifications vou propose. You vvill, I hope, understand that the substitution of H )n. VIr. Justice Johnsan. for Hon. Mr. Justice Davidson for the reasons wiiicli you give me would ii )t be just tifiable. This would be to insinuate in official do;ni.'nent3 of the highe.st importance that Mr. Justice Da 'ion, in assunungthe ermine, has not cast off p )litical animus. Therefore, plcast luse to be prepared, without delay, for examination a draft report of the Executive with reference to the Royal Commission to be appointed and com])08ed, by order of seniority, of Hon. Mr. Louis A. Jette, Judge of the Su{)erior Court, Hun. Louis Francis George Baby, Judge of the Court of Queen's Bench, and Hon. Charles Peers Davidson, Judge of the Superior Court, all three of the city of Montreal, to investigate and repojt upon the facts and circumstances which have pre- ceded, accompanied, given rise to and followedthe transactions made under the Act 64 Vict., chap. 88, in so far as it affects the Baie des Chaleurs Railway Company, and also a draft of the Royal Commission. Your obedier.t servant, I have the honor to be, sir, " (Signed,) A. P ANGERS, ■ ' • *• Lieutenant-Governor. Government House, Quebec, September 18, 1891. HoNOBABtK HoNORA MeBCIER, Prime Minister of Quebec. Sir : — I have tlie honor to acknowledge the receipt of your letter in answer to min» in which I took up certain points of law and of fact contained in your memorandum of the 15th instant. I have the honor to be, sir, Your obedient servant, (Signed,) A. R. ANGERS, Lieutenant-Governor. GrOVEBNMENT HoUSE, j|, Quebec, September 18, 1891. HoNoitABLE Honors Mercikr, Prime Minister of Quebec. Sir: — I have the honor to acknowledge the receipt of your letter containing the docimients which you wish me to forward to His Excellency the Governor General. I will add to these documents a copy of the letters which 1 send you to-day. I have the honor to be, sir, Your obedient servant, (Signed,) A. R. ANGERS. Lieutenant-Governor. Cabinet du Premier Ministre de la Province de Qulhec. Quebec, Sept 19, 1891. May it please Your Honor, — I have the honor to forward you for examinatiou, in pursuance of your desire, the report in Council recommending to you tho nomina- tion of a Royal Commission, as agreed between us, in the Baie des Chaleurs afl&tir, aa well as the draft of the commission. — 37 — I hope that you will be satisfied with the diligence 1 have used in preparing thtiso •documents be lore my departure for Montreal, from whence I will return on Thursday next, my intention being to assist as muclf as possible in my capacity as Minister of Agriculture at the grand expos'^^'on now being held in that city. Accept the assurance of the high consideration, with which I have honor to be, Your very devoted, ; ■ (Signed) HoNoni MKRaKR, ■ ' Prime Minister. The Hon. AuQtTSTE Real Angkrs, Lieut.-Governor Province of Quebec. ' . ■" Government House, '• Quebec, this 21st Sept. 1891. HoNOKABl.E HONOKE MeRCTER, Prime Minister, Montreal. Sir, — I have the honor to acknowledge receipt of your letter of Sept. 19, which was received Saturday afternoon, containing your report; that of the Executive Coun- cil, and the draft of the '.loyal Commission in the Bale des Chaleurs railway affair. I have made, with the consent granted by you to me in advance, certain modifi- cations and filled in cerUin omissions. I have given the j)residency of the com- mission to Hortl Judge Jett^, and I have given to the Commissioners the power to «mploy a clerk, stenographers and other required officials, and to have their proceed- ings, the evidence and their report printed. I have also fixed the place of meetir^ at Quebec, or elsewhere if the ends of justice require it; audi have in consequence modified tlie draft of the commission. Sunday morning, my secretary, Mr. Tach^, placed these documents in the hands of Mr. Grenier, clerk of the Executive Council. I beg of you to cause to be prepared the royal commission in triplicate with all •practicable speed, and to cause an extra of The Official Gazette to issue for its publica- tion. Will you also have copies made of all correspondence exchanged between us so that in tiio exercise of my prerogative I may transmit to the commissioners so that they may by this means take communication and be officially informed thereof. I thought this mode preferable to that of repeating in your report, in tliat of the Execu- tive Council, and in the commission the matters which the commissioners are charged to investigate. It is necessary that an order-in-council should be adopted to place, at the dispo- «ition of the commissioners, a certain sum of money towards defraying the expenses «f the commission. I liave the honor to \ye, Your devoted servant, (Signed,) A. R. Angers, Lieutenant-Governor* Copy of the report of a Committee ofthe Honorable the Executive Council dated the 19th September, 1891, approved of by the liieutenant-Governor on the 19th September, 1891. No. 410. Tha Honorable Minister m a report dated the 19th September instant, (1891,) «ets forth : that it is advisable in the public interest that a Royal Commission do issue under the authority of articles 596 and following of the Revised Statutes of the Pro- Tinoe of Quebec, respecting inquiries concerning public matters, addressed to the THonorable Louis A. .TetU^, Judge of the Superior Court, Louis Francois Baby, Judge of the Court of Queen's Bench, and Charles Peers i>avi(lson. Judge oi the Sufjerior Court, all three of the City of Montreal, ^ the said Honorable Louis A. Jett6 to be, on account of seniority, the president of the said commissioners, authorizing the said commissioners to inquii-e into and report upon the facts •nd circumstances which have preceded, accompanied, given rise to and followed the transactions made under the Act 54 Victoria, chapter 88, in so far as it relates to the Baie des Chaleurs Railway Company, and for that purpose conferring upon th« ■ ^1*5:, ' ,. — 38 Mid commissioners all the ^Kiwera granted in and by the said articles and especially the power of summoning witnesses before them, of requiring them to give evidence uider •ftth, either orally oir in writitiij, and to pfcduce the documents and things which they deem requisite to the full investigation of the matters into which they are appointed to inquire, and further authorizing the said commissioners to employ a clerk, steno- graphers and other necessary olHcers, and to cause the minutes of their proceedings, the evidence and their report to be printed ; the sittings of the said commission to be held in the City of Quebec orclsowhere in the Province, if the ends of justice require it. Certified. (Signed,) Gustavk Gkknxrb, Clerk of the Executive Council. Canada, ) Province of Quebec, \ , A. R. ANGERS. [L-S.] j ' Victoria, by the Grace of God, of the United Kingdom of Great Britain and Ireland, Queen, Defender of the Faith, &a, &c., «&c. To ai) to whom these presents shall come or whom the same may concern — Gi«BBnNO : . A PROCLAMATION. J. E. RoBiDonx, ) Whereas by a report of the Honorable Prime Minister, by a report Atty. -General, j of the Honorable Executive Council for Our Province of Quebec, and by an order of Our Lieutenant Governor in Council it is declared that it is advisable, ia the interest of the public, that a Royal Commission be issued to inquire into and report, on the facts and circumstLincos which preceded, accompanied, caused and fol- lowed the transactions made under tlie Act 54 Vict, chapter 88, in so far as it relates t« the Bale des Chaleurs Railway Company ; And Whereas We have deemed it advisable, in the interest of the good govenx- nent of Our said Province, that such inquiry be made ; Now know ye, that by the advice of the Executive Council of Our Province of Quebec, and under the authority of article 596 and following of the Revised Statutes 1. Mat rr Pleask Your Honour, On my arrival Lore this morning from Montreal, I find your It^terof *.ae 21st iMiitant, and I hasten to answer it As you are no doubt aware the commissions are sent and the Quebec Official Ganette extra has been published. I am having a copy made, as you requested, of all the correspondence between us and it will shortly be at your disposal. > I have drawn up the ro{)ort in council to place a certain sum of money at the disposal of the commissioners to contribute towards defraying the expenses of the expenses of the commission as you asked me to do in your Tetter, but 1 would beg you to let me know what amount I should recommend. Pray accept the assurance of the high consideration with which I have the honour to be, Your obedient servant, (Signed) HONORE MERCIER. HotrouRABiiE AuausTH Real Anqsrs, Lieutenant-Governor of the Province of Quebec, Spencer Wood. GOVRRNMKNT HOUSR, QuKBKO, 26th September, 18dl. H«1T0URARLE HoNORA MbRCIBR, Prime Minister, Quebec Sib, — I have the honour to acknowledge the receipt of your letter of this dajr aaking me what amount should be placed at the disposal of the commissioners in re the Bale des Chaleurs Railway. I think that a sum of $2,000 would suffice for the present I have the honour to be, sir, Your obedient servant, / (Signed) A. R. ANGERS, Lieutenant-Governor. Copy of the report ofa Committee o: the Honourable the Executive Council, dated the 24th September, 1891, approved by the LieutfouanlrGovernor on the i.'itli ieptember, 1891. Ho. 411. On the issuing of a special warrant foi: $2,000 00- The Honourable Provincial Treasurer in a report dated the 24th September instant, 1891, sets forth that it is necessary to place a certain sum at the disposal of the commissioners appointed by order-in-council No. 410, dated the 19th instant, to inquire into and report upon the matter of the Baio des Chaleurs Railway ; that the •am of two thousand dollars ($2,000. 00) would be suflicient to defray the first expenses. That as there is no statutory appropriation out of which this amount can be paid. the Honourable Treasurer therefore recommends that a special warrant for the said •am of two thousand dollars be issued to enable the Treasury to meet the first ex- penaoB of the said commisoioners. Certified. (Signed) QU8TAVE GRENIER, Clerk of the Executive Council,